Kodak Settles ERISA Stock Drop Suit

Subject to a court’s final approval, Kodak and a group of employees suing the company have reached a settlement agreement that includes a cash payment of $9,700,000. 

Participants in the  Eastman  Kodak  Employees’ Savings  and  Investment  Plan  (SIP)  and/or  the  Kodak Employee  Stock  Ownership  Plan  (ESOP), sued the company after it filed for bankruptcy in 2012. The participants alleged that Kodak fiduciaries violated the Employee Retirement Income Security Act (ERISA) by permitting the plans to offer  Kodak  stock  as  an  investment  option  after objective information  revealed  that  Kodak  was in  extreme  financial  distress  and  that  Kodak  stock  was  an  extremely  risky  investment  that  was imprudent  for  retirement  asset  investment. 

The lawsuit covers a class of participants and beneficiaries in the plans that were invested in the Kodak stock fund. According to the settlement agreement, there are more than 21,000 members of the class. 

The settlement agreement for In Re Eastman Kodak ERISA Litigation is here.