A U.S. District Court judge in Alexandria, Va., dismissed a 401(k) plan participant lawsuit against Gannett Co. and plan executives alleging they violated their fiduciary duties for holding too much stock in Gannett's former parent company in the 401(k) plan.
Judge Anthony J. Trenga dismissed the lawsuit on Wednesday, saying the plaintiff, Jeffrey Quattrone, a participant in the Gannett Inc. 401(k) Savings Plan, failed to allege any facts that would lead to proving a breach of fiduciary duty under the Employee Retirement Income Security Act of 1974.
The original court filing of Quattrone vs. Gannett Co. Inc. et al. in March said the company "caused the plan to be undiversified by their failure to decrease the plan's substantial holdings" in 2015 and 2016 of the stock of the former parent TEGNA Inc., following the spinoff in June 2015 of Gannett.
"The plan's holdings of TEGNA common stock should have been liquidated on or shortly after the date of separation," said the original complaint, which said the defendants failed their fiduciary duty by not going through an independent review of the "prudence" of the TEGNA stock. Mr. Trenga, however, said the plaintiff did not provide plausible reason that the lack of such an investigation was an ERISA fiduciary breach.
The plaintiff filed a motion Wednesday to amend the complaint based on new facts learned from discovery.
The 401(k) plan had $1.1 billion in total assets as of Dec. 31, 2016, according to its most recent Form 5500 filing.
The complaint said the plan held $178 million in TEGNA stock at the end of 2015 and $116 million at the end of 2016. The plan also held $83.1 million in Gannett stock at year-end 2015 and $65 million as of Dec. 31, 2016.
Izard, Kindall & Raabe, attorneys for the plaintiffs, declined comment, and Gannett Co. officials could not be immediately reached to provide comment.