Kmart ERISA Retirement Savings Plan Litigation

     The Settlement Agreement received final approval on June 28, 2006.   The Court found that the settlement was fair, reasonable, and adequate.  The settlement provides payment to the class of $11.75 million, less attorneys’ fee, incentive award, and expenses.  In addition, another $200,000.00 will be paid by the Defendants’ insurer for administrative expenses.  The Amended Plan of Allocation filed June 23, 2006 sets forth the calculations to determine  a participants’ share. 

     Pursuant to the terms of the Settlement Agreement, the payment of the proceeds are to be made within 30 days of the entry of Final Judgment.   The Settlement Administrator will then calculate the specific amount attributable to each individual participant.  After these calculations are made, the Settlement Agreement provides that the money will then be paid to the Plans, which will then allocate the money to each individuals’s account as provided in the Amended Plan of Allocation.  The full details of the Settlement Agreement may be located at the link below.

• Order approving Final Settlement

• Class Action Complaint  (PDF)
  
• Order Denying Defendants' Motions to Dismiss  (PDF)
  
• Order Granting Class Certification  (PDF)
  
• Order Preliminarily Approving Settlement (with Exhibits) (PDF)
  
• Notice by Publication (PDF)
  
• Notice by Mail (PDF)

• Settlement Agreement (PDF)

This case related to claims that the Defendants breached their fiduciary duties under ERISA to the 401(k)/ESOP Retirement Savings Plans of Kmart.   The Complaint alleged that the Defendants breached their fiduciary duties by continuing to retain and invest in Kmart stock when it was imprudent to do so and that the Defendants breached their duties to disclose making material representations about the strength of Kmart as an ongoing entity and the propriety of investing in Kmart stock.  The Court denied the Defendants’ Motion to Dismiss on August 20, 2003, Rankin v. Rots, 278 F.Supp.2d 853 (E.D. Mich. 2003).  The class was conditionally certified by the Court on April 16, 2004, Rankin v. Rots, 220 F.R.D. 511 (E.D. Mich. 2004).  The Settlement Agreement was entered into on November 16, 2005.  Preliminary approval was granted on February 9, 2006. 

For additional information on this litigation, please contact Glen Connor at 1-800-721-9361 or gconnor@whatleydrake.com.