Summary of the Lawsuit
This lawsuit alleges that the fiduciaries of the InterArch, Inc. Profit Sharing Plan breached their fiduciary duties by failing to prudently, loyally invest and properly diversify the investments of Plan assets in violation of the Employee Retirement Income Security Act of 1974 (“ERISA”). The lawsuit also alleges that the fiduciaries of the Plan engaged in prohibited transactions by investing the assets of the Plan in companies that the Trustee's husband had founded and had substantial investments and control over.
Summary of the Claims
The Complaint alleges that the Trustee of the Plan, Shirley Hill, invested at least 70% of the Plan assets were invested in the stock Metro Bank – which is a company for which her husband, Vernon Hill, was the founder, and then-Chairman. Beginning in March 2018, Metro Bank stock steadily declined. Between November 1, 2018 and October 31, 2019, the assets of the InterArch, Inc. Profit Sharing Plan declined by $13,241,354 from $17,140,761 to $3,899,407. And $12,537,629 of the decline in net assets was in the value of the Plan’s investments. According to filings submitted to the US Department of Labor, approximately 70% of the Plan’s assets were undiversified as of October 31, 2018 and almost 90% of the Plan’s assets were undiversified as of October 31 2019.
The Complaint alleges that most, if not all, of the decline in the Plan’s assets could be attributed to the decline of the value of Metro Bank stock.
Class Action Allegations
The Court has certified the Claims on behalf of the following persons:
All participants in the InterArch, Inc. Profit Sharing Plan at any time between March 6, 2018 to the present (except those who terminated without vesting) and the beneficiaries of any such participants.
Excluded from the Class are (1) Defendants, (2) any fiduciaries of the Plan, who are alleged to have engaged in prohibited transactions or breaches of corporate fiduciary duties, or who had decision-making or administrative authority relating to the administration, investment allocation, modification, funding, or interpretation of the Plan, (3) any beneficiaries of the foregoing as well as any members of their immediate families, and (4) any of their successors, executors, or assigns.
Status of the Litigation
The Complaint was filed on May 27, 2020. Defendants answered the Complaint on July 28, 2020.
After several settlement conferences with the Magistrate Judge, the Parties reached a settlement in principle on behalf of the Class. The Court has preliminarily approved the settlement. Class Counsel filed their Motion for Attorneys’ Fees and Costs on May 27, 2022. A final fairness hearing will be held on August 16, 2022 at 10 a.m. at the United States District Court for the District of New Jersey, Mitchell H. Cohen Building &U.S. Courthouse, 4th & Cooper Streets, Camden, NJ 08101.
Plaintiff and Defendants agreed to a settlement in this case and moved for its preliminary approval on September 10, 2021. Under the settlement, Defendants agreed to pay $950,000 to resolve all the claims of the class. After subtracting the court-approved attorneys’ fees and costs and class representative service award, the remaining amount of the $950,000 settlement fund will be distributed to the participant class members and beneficiaries who would be entitled to payment under the terms of the Plan.
The Court granted the Motion for Class Certification & Preliminary Approval of the settlement on April 8, 2022. Formal notice of the settlement was mailed to class members on May 2, 2022.
Class members will have until July 4, 2022 to file challenges to his or her data or to file an objection to the settlement or to Plaintiff’s Motion for Attorneys’ Fees & Costs.
Whom to Contact for More Information
If you are a member of the proposed class or you have information which might assist us in the prosecution of these allegations, please contact one of the following persons:
R. Joseph Barton, Esq. (firstname.lastname@example.org)
Colin Downes, Esq. (email@example.com)
Ming Siegel, Paralegal (firstname.lastname@example.org)
Block & Leviton LLP
1633 Connecticut Ave. NW, Suite 200
Washington DC 20009
Block & Leviton LLP is co-counsel in this litigation with The Garner Firm, Ltd.
Contact our attorneys for a no-cost case evaluation.