Status of Settlement Distributions:
The settlement proceeds have been transferred to the Republic 401(k) Plan for allocation to class members’ accounts. Class members who are current participants of the Republic 401(k) Plan account will have their settlement payments deposited into their existing 401(k) Plan account. Class members who are not already participants will have a 401(k) Plan account created for them. Class members will also receive a distribution election packet in the mail from Vanguard with information on how to request a rollover of the settlement payment into an IRA or another eligible retirement plan, or receive a cash distribution (less tax withholding). Class members who do not request a rollover or cash distribution can keep their settlement payment in the Republic 401(k) Plan to be invested according to their investment instructions or the default investment options.
Please contact Vanguard at 1-800-523-1188 if you have questions about the Republic 401(k) Plan including how to receive a distribution and how to update your investments.
For Questions about Settlement Procedures, Forms & Administration of the Settlement, or the Information about You, Contact the Settlement Administrator:
You may contact the Settlement Administrator at the following address, email or toll-free telephone number:
Rainbow ESOP Lawsuit Settlement Administrator
c/o CPT Group, Inc.
50 Corporate Park
Irvine, CA 92606
Telephone (Toll Free): 1 (888) 680-0534
You should contact the Settlement Administrator about any questions about the amount of your shares.
For additional information about the settlement, please visit www.RainbowESOPLawsuit.com.
For Questions about the Lawsuit or the Settlement Overall (and of the Settlement Administrator cannot answer your questions, Contact Class Counsel by email at Rainbowesoplawsuit@blockesq.com.
Summary of the Lawsuit
The lawsuit challenges the October 2014 sale by the Rainbow Disposal Company ESOP of 100% of the stock of Rainbow Disposal to Republic Services because the sale violated various provision of the Employee Retirement Income Security Act of 1974 (“ERISA”) and alleges breaches of fiduciary duty in connection with the transaction and the management of the assets of the Plan.
Summary of the Claims
Prior to the sale in October 2014, the Rainbow ESOP owned 100% of Rainbow. The Complaint alleges that the sale by the ESOP was not for adequate consideration and constituted a breach of fiduciary duty. Among other things, the Complaint alleges that the sale was based on an outdated valuation, the sale price was less than the fair market value in that valuation, that certain fiduciaries breached their fiduciary duties in connection with the sale, including by failing to provide appropriate and accurate disclosures and information. Additionally, the Complaint also alleges that the sale was accomplished without holding a vote by the ESOP participants, as required by the Plan Document and as promised in the SPD. The Complaint also alleges that the sale was accompanied by prohibited transactions by certain fiduciaries and the failure to properly manage plan assets. Finally, the Complaint alleges that of the $15 million of proceeds from the sale that was distributed for more than 2 years, the ESOP fiduciaries failed to properly invest or diversify those assets which resulted in substantial losses to the plan participants.
Class Action Allegations
This lawsuit was certified as a Class consisting of the following persons:
All persons who were vested participants in the Rainbow ESOP as of October 1, 2014 and the beneficiaries of any such participants.
Excluded from the Class are Defendants and persons who were named fiduciaries of the Rainbow ESOP, 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, modification, funding, or interpretation of the Rainbow ESOP, or relating to the decision to sell Rainbow.
Status of the Litigation
The Class Action Complaint was filed on September 15, 2017. Plaintiffs filed an Amended Complaint on February 28, 2018. Defendants filed separate Motions to Dismiss on March 21, 2018 and March 28, 2018. On July 9, 2018, the Court issued an Order denying Defendants’ Motions to Dismiss in their entirety. Plaintiffs filed a Motion for Class Certification on December 18, 2018, which was granted by the Court on April 22, 2019. Plaintiffs filed a Second Amended Complaint on February 6, 2018.
Plaintiffs reached a settlement on behalf of the Class to settle the claims in this Litigation. On July 27, 2020, Plaintiffs filed the Motion for Preliminary Approval of Settlement.
The Motion for Preliminary Approval was granted on January 4, 2021. The Class Notice was sent to Class Members identified in Defendants records on March 22, 2021. A final fairness hearing was held on May 21, 2021 and the Court granted the Motion for Final Approval of the Settlement that same day.
Unless someone files an appeal, the settlement will be final and non-appealable on July 6, 2021. After that date, Class Counsel and the Settlement Administrator will work to distribute the settlement proceeds to members of the Class. This will take at least 45 days after July 6, 2021 but may take slightly longer. Your patience is appreciated. This website will be updated. Contacting Class Counsel to merely inquire about the date for payment slows down the process.
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:
Block & Leviton is co-counsel in this litigation with Creitz & Serebin LLP.