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Settlement, Legal Fees OK'd in GE Retirement Class Action
$40 million goes to retirees and changes in GE plan; an additional $10 million goes to plaintiffs lawyers
New York Law Journal
August 13, 2009
A federal judge has approved a settlement worth just over $40 million between General Electric and retirees (pdf) over the company's decision to put up GE stock as an investment and matching contribution in its retirement program. Retirees contended the investment of company stock was not economically prudent and that their retirement benefits suffered as a result, Northern District of New York Judge Gary L. Sharpe noted.
Notices of the class action were sent to more than 318,000 potential members. A settlement was reached after discussions mediated by Daniel B. Weinstein, a retired California state court judge. About $10 million of the settlement will go to payments, of up to $5,000 each, for retirees who claimed they were damaged financially by GE's investment. GE also agreed to make another $30 million in "structural changes" to the retirement plan.
Judge Sharpe also upheld as "reasonable" the awarding of $10 million in attorney fees for plaintiffs lawyers, money the judge determined should not come out of the $40 million settlement. Sharpe noted the complexity of the case and the "quality of class counsel" in upholding the payment to the attorneys. OConnell & Aronowitz; Milberg LLP; Coughlin Stoia Geller Rudman & Robbins and The West Firm were the New York firms that represented the retirees.
About three-quarters of the members of the class are current GE retirees and 25 percent are former beneficiaries of the pension plan.
The case is Bezio v. General Electric Company, 06-cv-381.
