The case ascended on appeal from the U.S. District Court for the Western District of Texas, where it also flatly failed to meet the high hurdles for proving standing established in Fifth-Third Bank vs. Dudenhoeffer.
A federal judge is allowing the plaintiff one last chance to make more context-specific arguments in her case.
A judge agreed that the plaintiffs failed to plead facts to state a claim for breach of the duty of prudence and the duty to diversify against the investment committee for the Phillips 66 Savings Plan.
The lawsuit contends the plan’s holdings of the parent company's common stock should have been liquidated on or shortly after the date Gannett was separated from its parent.
The bank also agreed to continue funding matching contributions to its 401(k) plan in the form of cash or cash equivalents for a period of time.
Relying on standards set forth by the Supreme Court in Fifth Third Bank v. Dudenhoeffer, an appellate court affirmed a district court’s dismissal of the case.
The 9th Circuit ruled that a prudent fiduciary in the same circumstances as the defendants could view the proposed alternative course of action regarding company stock in Hewlett-Packard's 401(k) plan as likely to cause more harm than good without first conducting a proper investigation.