Joy Global Inc., Milwaukee, reached a $10.8 million settlement with employees of the former Harnischfeger Industries Inc., Joy Global's predecessor company, in a lawsuit claiming Harnischfeger officials should have warned its 401(k) participants about the risks of investing in company stock, according to court documents.
The settlement was finalized Monday in U.S. District Court in Boston and will be split among 4,700 employees who lost money from their investments in company stock made prior to Harnischfeger's 1999 decision to file for Chapter 11 bankruptcy protection. The company emerged from financial restructuring as Joy Global in 2001.
The lawsuit claimed that Harnischfeger officials allowed 401(k) assets to be invested in company stock when the firm was close to bankruptcy. The lawsuit also claimed company officials violated federal law by failing to disclose Harnischfeger's true financial status.
Nancy Ross, an attorney with the law firm of McDermott Will & Emery who represented Joy Global, did not return calls seeking further details.