A federal judge in Georgia has dismissed a complaint against Home Depot Inc. by participants in a company defined contribution plan who alleged the Atlanta-based company, its officers and directors breached their fiduciary duties in managing the plan.
The original complaint was filed in August 2006 by Raymond Lanfear, a former Home Depot employee and a participant in the Home Depot FutureBuilder DC plan. His complaint said Home Depot failed to “prudently and loyally manage the plan” by continuing to offer company stock as an investment option “instead of suitable short-term investment options within the plan, when the stock was no longer a prudent investment for participants’ retirement savings.”
The initial complaint was filed in U.S. District Court in New York. Since then, four more former Home Depot employees joined as plaintiffs and the complaint was amended twice, according to the Georgia federal judge’s ruling. The case was moved to the U.S. District Court in Atlanta.
On June 7, Judge Orinda D. Evans granted the motion by the defendants to dismiss the case. The judge said a 16% decline in Home Depot’s stock after the release of fourth-quarter 2004 financial results “is not dramatic enough to show that the prudent course of action would have been for the (plan’s) investment committee to disregard the plan document to cease matching contributions in Home Depot stock and delete Home Depot stock from the list of available investment funds.”