(Updates with lawyer’s comment in fifth paragraph)
Oct. 5 (Bloomberg) -- Former Lehman Brothers Holdings Inc. officers and directors won a dismissal of a lawsuit alleging they failed to protect against losses in the company’s savings plan.
The case was brought under the Employee Retirement Income Security Act, according to the ruling by U.S. District Judge Lewis A. Kaplan in Manhattan. Plan beneficiaries argued the company officials failed to prevent the losses while knowing of Lehman’s deteriorating condition.
Kaplan said the amended complaint’s allegations “do nothing to connect the plan committee defendants to anything specific that alerted or should have alerted them to the alleged dire situation at Lehman.”
Lehman, which filed the biggest bankruptcy in U.S. history in September 2008, has been settling disputes and gathering votes since July for its $65 billion liquidation plan. Lehman filed for bankruptcy with assets of $639 billion.
Mark Rifkin, a plaintiffs’ attorney, said in an e-mailed statement that he will appeal the ruling “exonerating the fiduciaries of the Lehman retirement savings plan from liability to thousands of former Lehman employees, who lost hundreds of millions of dollars of retirement savings when Lehman filed for bankruptcy.”
“We believe the decision overlooked the facts and misapplied the law,” Rifkin said.
The savings retirement plan for Lehman employees at issue in the case allowed contributions as a percentage of pay, and permitted employees to allocate the contributions in different types of accounts, such as the Lehman Stock Fund, which invested only in Lehman common stock, cash and short-term fixed income securities, according to the ruling.
The cases are In Re Lehman Brothers Securities and ERISA Litigation, 09-md-02017, and In Re ERISA Litigation, 08- cv-05598, U.S. District Court, Southern District of New York (Manhattan).
--Editors: Andrew Dunn, Peter Blumberg
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