CASES
General Motors
Summary of Case:
This action, filed in March 2005 on behalf of the participants in General Motors' ("GM") retirement plans, alleged among other things that GM improperly invested billions of dollars in GM stock in employee 401(k) plans, that GM ignored facts that should have alerted them that GM's stock was not a wise investment, and that given the high concentration of 401(k) plan assets that were invested in GM stock the defendants should have had in place procedures to ensure that employee retirement funds were not subject to the whims of GM's stock price. At the time of the action's filing, GM shares had dropped more than 42% since the end of 2003.
Following extensive and hard-fought litigation with the Company, the action settled. The Settlement provided a cash fund of $37.5 million on behalf of the participants and beneficiaries of the General Motors Savings-Stock Purchase Program for Salaried Employees and the General Motors Personal Savings Plan for Hourly Rate Employees who held GM Stock in their Plan accounts during the period from March 18, 1999 through May 26, 2006.
In addition to the monetary recovery, Settlement Class Members also received substantial additional benefits, including that: (1) GM has retained an independent fiduciary to monitor the prudence of offering GM stock as an investment in the Plans, which has mitigated against the risk of large losses since then (2) GM has not made matching contributions in the form of investment in Company Stock, which has lead to greater diversification in the Salaried Plan; (3) GM has maintained upgraded communications to Plan participants concerning the available investments in the Plans; (4) GM has provided a Savings Plan portfolio tool that enables Plan participants to model various retirement scenarios free of charge; and (5) "Money in Motion," a one-year financial advisory program from Ayco Company, has become available to all Plan participants at a significantly reduced cost.
If you purchased this company's shares during the Class Period and suffered a loss or for further information about the case, please review the links below.