W.R. Grace & Co., Columbia, Md., faces a class-action lawsuit from its 401(k) participants over the steep decline in the plan's value because of its company's stock, which was one of the plan's investment options. The suit, filed in U.S. District Court in Massachusetts, names the company's directors and top officials as well as providers Fidelity Management Trust and State Street Bank as defendants, according to Grace's latest 10-Q filing. The suit claims the defendants should have known that the company stock had become an "imprudent investment" largely because of the company's exposure to asbestos-related liabilities, and that they failed to disclose to plan participants ahead of time the risk of investing in the company stock. Grace officials said they believe the lawsuit will be postponed until the company emerges from Chapter 11 bankruptcy protection and that the lawsuit is "without merit," and any resulting liabilities will be covered by the firm's fiduciary liability insurance policy for officers and directors, according to the filing.
401(k) participants sue W.R. Grace over drop in plan value
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