Moog Controls Inc. pension fund trustees’ lawsuit against Manufacturers & Traders Trust over substantial investment losses will continue in U.S. District Court, Rochester, N.Y., while the same court last week dismissed M&T’s suit seeking a declaration that it hadn’t breached its fiduciary duty in managing the investments.
Trustees for the Buffalo-based pension plan argue M&T changed to a risky, inappropriate investment strategy that "caused the plan to incur significant losses” in the late 1990s, according to the trustees’ pending complaint, filed in September.
C. Michael Zabel, M&T vice president-corporate communications, said the M&T suit was dismissed on procedural grounds, but M&T continues to deny breaching fiduciary duty.
In a filing, M&T argues that in 1999, Moog Controls trustees terminated M&T and "imprudently and prematurely liquidated all equity positions held by the plan and substantially damaged the value of the plan’s assets.”
The Moog Controls trustees seek to restore the plan to the financial position it would have attained had M&T not breached its fiduciary duty, according to the trustees’ complaint. Paul K. Stecker, attorney with Phillips Lytle Hitchcock Blaine Huber, which represents the trustees, estimates the amount would be $4 million plus opportunity costs.
Mr. Stecker said Ernst & Young Investment Advisory Services now assists the fund, which has about $8.5 million to $9 million in assets. He had no further details on the current investment management.
