Participants who sued two Eastman Kodak Co. retirement plans and other defendants have reached a preliminary settlement that would provide $9.7 million to plaintiffs and to cover attorneys’ fees, which could amount to one-third of the award.
The preliminary agreement must be approved by U.S. District Court Judge David Larimer in Rochester, N.Y., in whose court seven separate lawsuits since early 2012 were consolidated into the single case. The proposed settlement agreement was filed April 22 with Mr. Larimer.
The plaintiffs were participants in the Eastman Kodak Employees’ Savings and Investment Plan and/or the now-closed Kodak Employee Stock Ownership Plan. They sued fiduciaries of the two plans, saying they violated their ERISA duties by permitting the plans to continue offering Eastman Kodak stock as an investment option as the company financial condition deteriorated, the document said.
The class-action suit covers participants or beneficiaries of both plans between Jan. 1, 2010, and March 31, 2012. Investors in the savings and investment plan are included in the class only if they had invested in the Kodak stock fund.
According to a court document, the participants maintained that the defendants “violated the fiduciary duties of loyalty, care and prudence” under ERISA by keeping Kodak stock as an investment in both plans even as the company’s finances and stock price deteriorated. Eastman Kodak filed for Chapter 11 bankruptcy protection in January 2012. It emerged from bankruptcy in September 2013.
“The defendants have expressly denied any wrongdoing or liability of any kind and believe that they would have been ultimately successful,” the document stated.