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Compliance November 11, 2011
YRC Worldwide Agrees to Settlement of Stock Drop Suits
YRC Worldwide Inc. has agreed to pay $6.5 million to settle lawsuits brought by its employees over losses in their retirement accounts from investments in company stock.
Reported by Rebecca Moore
According to the Kansas City Star, employees claimed the plan continued to offer company stock after it was no longer prudent to do so (see “Stock Drop Suit Survives Initial Challenge“). The share price plummeted from high of $25.96 per share in October 2007, to a low of $0.45 per share in March 2010. In May, the U.S. District Court for the District of Kansas rejected the trucking company’s Employee Retirement Income Security Act (ERISA) Section 404(c) defense against giving plaintiffs class action status (see “Court Rejects 404(c) Defense in Certifying Stock Drop Suit Class“).
The news report says YRC disclosed the settlement, reached on October 31, in its quarterly financial filing with the Securities and Exchange Commission. The settlement applies to employees who were participants in the plan since October 25, 2007.
The filing said employees covered by the class action lawsuits would not be able to opt out of the settlement agreement.