Court Approves Settlement of Wachovia Stock Drop Suit

The U. S. District Court for the Western District of North Carolina has approved a $12.35 million settlement in an ERISA fiduciary breach case against Wachovia.

The class action suit claims fiduciaries of the Wachovia Savings Plan and the A.G. Edwards, Inc. Retirement and Profit Sharing Plan breached their fiduciary duties to act solely in the interest of the participants and beneficiaries of the plans, and to exercise the required skill, care, prudence, and diligence in administering the plans and the plans’ assets by continuing to offer company stock as an investment option when it was no longer prudent.  

The court had previously dismissed the suit, finding that the plan document required that company stock be included as an investment option for the plan. The plaintiffs appealed, and a settlement agreement was reached while the appeal was pending.  

The court noted that the plaintiffs’ attorneys, Keller Rohrback, have “extensive experience” in such cases and would likely continue its “vigorous defense” of the case. “The Settlement obviates that delay and restores some value to the Plans,” U.S. District Judge Martin Reidinger wrote in his order.  

In addition, the court concluded that an attorneys’ fee equal to 15% of the settlement fund constitutes a reasonable award in the case. “The Court finds that such an award is ‘high enough that these particular attorneys, skilled as they are, are not put in a financial situation where they will be unable or unwilling to pursue similar types of class action litigation in the future’ but is not ‘so high . . . as to overcompensate plaintiffs’ counsel at the expense of the class, or to create a perception of such overcompensation,’” the opinion said. The court also found that an award of 15% is well within the range of awards made in similar complex class action cases.  

The case is In re Wachovia Corp. ERISA Litigation, W.D.N.C., No. 3:09-cv-00262-MR.