Florida gives OK to file suit against Alliance Capital
TALLAHASSEE, Fla. - The Florida State Board of Administration on April 23 authorized its legal counsel to file suit against Alliance Capital Management because of losses from the plan's investments in Enron Corp. stock. The $96 billion system asked its attorneys to attempt to negotiate a settlement with Alliance before the suit is filed in Leon County, Fla., Circuit Court. A date for the filing has not been set.
Tom Herndon, executive director, said previous attempts at a negotiated settlement with Alliance have been unsuccessful. The board claims Alliance lost $282 million in state pension money through Enron investments.
John Meyers, Alliance spokesman, did not return calls seeking comment by press time.
Separately, the board delayed naming Coleman Stipanovich as its executive director, replacing Mr. Herndon, effective June 30. Some board members have not completed their interviews with Mr. Stipanovich. The board will discuss his appointment at its May 7 meeting.
Georgia Employees managers may get more responsibility
ATLANTA - The $14 billion Georgia Employees' Retirement System may seek legislative and regulatory changes to its investment policy to give outside managers more fiduciary responsibility. In a preliminary report on its asset-liability study for the system, Callan consultant Jeanne Valcik said the investment committee should delegate more responsibility to outside managers through a "prudent person" rule and should eliminate the system's "legal list" of approved stocks. The committee currently must approve stock purchases. Callan also suggested the system implement portfolio rebalancing guidelines.
Nancy Boedy, state assistant director of the investment services division, said she did not know when the final Callan report would be available.
Kansas PERS raises leverage on loan values
TOPEKA, Kan. - The Kansas Public Employees' Retirement System increased the leverage on its loan values to 40% from 25%, said Robert Schau, real estate investment officer. "The spread between the low interest rates and strong yields makes it attractive," he said. The $9 billion system has $700 million in real estate investments.
Court OKs State Street Bank as Crucible Materials fiduciary
SYRACUSE, N.Y. - A U.S. District Court in Syracuse, N.Y., approved the appointment of State Street Bank as independent fiduciary of Crucible Materials Corp.'s six retirement plans. The ruling was sought by the Labor Department.
Also, the Labor Department sued Crucible and the plans' retirement committee for improperly converting corporate stock held by the plans to common stock in order to recapitalize the company. The DOL claimed the conversions violated the Employee Retirement Income Security Act because at least 50% of the converted stock was not held by independent investors. The suit also contends the defendants allowed the plan violations to continue and failed to correct the improper conversion to common stock.
The plans had a combined $143 million in assets as of Dec. 31, 1999, the latest date for which numbers were available. The company suffered financial difficulties prior to 1994 and restructured its capital after it was unable to pay dividends on preferred stock holdings.
West Virginia legislators fail to approve alternative request
CHARLESTON, W.Va. - West Virginia Investment Management Board's request to invest 5% of assets in alternative investments was not approved by state lawmakers at the recently completed legislative session, said H. Craig Slaughter, executive director of the $5.4 billion system.
Separately, trustees at their May 15 meeting hope to identify and approve a list of plaintiffs' law firms to deal with in case of securities class-action lawsuits, Mr. Slaughter said. "We want to have relationships already established" in case of such lawsuits, he said.
PBGC takes over Durango Apparel pension plan
WASHINGTON - The PBGC took over the pension plan of bankrupt Durango Apparel Inc., New York, which has a $25 million shortfall. Durango, previously Henry I. Seigel Co., terminated its pension plan March 31. The plan has assets of $15 million, according to PBGC estimates.