A federal judge in South Carolina has approved a multi-million dollar class-action settlement between Piggly Wiggly Carolina Company executives and former employees who say they lost retirement benefits when the company collapsed.
Lawyers from both sides said that the precise value of the settlement is yet to be determined, but will probably be between $7.68 and $8.65 million, to be split between 6,596 potential class members.
“Plaintiffs’ counsel and the named plaintiffs believe that this is a significant win for the former Piggly Wiggly employees who are members of the class, and we are delighted to have achieved this result for our clients,” said John Moylan of Wyche Law Office in Columbia.
The Employee Retirement Income Security Act claim, which was filed in February 2016, alleged that company executives, acting as retirement plan fiduciaries, did not act in the best interest of their employees and instead “constantly prioritized protecting and enhancing their own personal interests and financial positions.”
The defendants collectively denied any wrongdoing or liability, saying they acted “reasonably and prudently with respect to the Plan, the participants and beneficiaries of the Plan, and the Settlement Class.”
After more than two years of litigation, including extensive discovery and a period of mediation under the direction of Thomas Wills of Wills Massalon & Allen in Charleston, the two sides decided to settle to save their clients from further legal fees.
“For my clients, a primary factor was the significant anticipated cost of defending a complex ERISA matter that would have included an appeal no matter the result at trial,” said defense attorney Brian Duffy of Duffy and Young in Charleston, speaking on behalf of two of the defendants. “It is much better for the client to use those funds toward eliminating all risk from the claims, no matter how great or small the risk.”
Moylan said his clients also accepted the settlement as a means of saving time and money.
“The Court held that ‘the settlement affords an immediate remedy for the Settlement Class members while obviating the need for further expensive and time-consuming discovery, motion practice, litigation and appeals,’” Moylan said.
He also explained that any significantly larger award from trial would likely have been unrecoverable.
As part of the agreement, individual executives will pay a total of $3.45 million, insurance providers will cover $1.7 million, about $1.5 million will come from the proceeds of a surety, and the rest will come from the proceeds of the sale of a piece of property that is owned by several executives and valued at between $975,000 and $1.95 million.
One third of the total amount will go to counsel for the plaintiffs. This brings the total amount to be split by class members to between $5.12 million and $5.77 million.
Moylan said the money is to be split proportionally based on the amount of money lost by shareholders.
While there were objections to the settlement, Moylan said they were few, and that all class members will receive the proportional payments they are owed. Duffy said that the settlement resolves all of the claims of all of the class members, including those who objected.
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SETTLEMENT REPORT — ERISA VIOLATIONS
Amount: $7.68 million to $8.65 million
Injuries alleged: Lost retirement benefits
Case name: Spires et al v. Schools et al
Court: U.S. District Court for the District of South Carolina
Case number: 2:16-cv-616-CWH
Mediator: Thomas Wills of Wills Massalon & Allen in Charleston
Date of settlement: Sept. 4
Attorneys for plaintiff: John Moylan and Alice Casey of Wyche Law Office in Columbia; Eric Amstutz, Rita Barker, Henry Parr Jr., and Wade Kolb of Wyche Law Office in Greenville; Gary Gotto of Keller Rohrback in Phoenix, Arizona; Erin Riley and David Ko of Keller Rohrback in Seattle, Washington; and Christopher Schoen of the U.S. Attorney’s Office in Charleston
Attorneys for defendant: Brian Duffy and Blake McKie of Duffy and Young in Charleston; Sean Abouchedid, Sarah Adams, Mark Bieter, Natasha Fedder, Lars Golumbic, Samuel Levin, Edward Meehan, and Andrew Salek-Raham of Groom Law Group in Washington D.C.; Lovic Brooks of Columbia; Steven Janik and Monica Towle of Janik in Hilton Head Island; Oana Johnson of Charleston; and Thomas Limehouse of the Office of the Governor in Charleston