A U.S. District Court judge in Omaha, Neb., has granted summary judgment for National Indemnity Co., rejecting claims by a participant in the company's 401(k) plan that plan managers violate their fiduciary duties.
The participant, Marc Muri, alleged that plan managers failed to "prudently manage" investments by offering a poor-performing mutual fund, the Sequoia Fund that had invested heavily in a troubled drug company, Valeant Pharmaceuticals.
"Contrary to Muri's contentions, National Indemnity was regularly monitoring and discussing Valeant's performance and its impact on the Sequoia Fund," John M. Gerrard, the chief U.S. District Court judge, wrote in his June 18 ruling.
The plan's investment committee "reviewed relevant, and most importantly reliable, valuation information," he wrote in the case Muri vs. National Indemnity Co., which was filed in May 2017. "The court concludes that no reasonable fact find could find for Muri on his duty of prudence claim."
The judge also rejected the plaintiff's assertion that National Indemnity had a conflict of interest because it is a subsidiary of Berkshire Hathaway and because the Sequoia Fund owned shares of Berkshire Hathaway stock.
"Muri has provided the court with no evidence from which a reasonable fact finder could conclude that the committee's decision to keep the Sequoia Fund can only be explained by an intent to further the interests of Berkshire Hathaway rather than plan participants," the judge wrote.
The National Indemnity Company Employee Retirement Savings Plan, Omaha, had $289.7 million in assets as of Dec. 31, 2017, according to the latest Form 5500.