|  | | 2007 News and Press Releases | | |
HEADLINE NEWS:
DOL Proposes Changes To ERISA Settlement Rules
Shannon Henson
Securities Law360. November 21, 2007
_________________________________________________________________________
EXCERPT: The U.S. Department of Labor on Wednesday proposed changes to the rules governing settlements made under the Employee Retirement Income Security Act. The department’s Employee Benefits Security Administration said it wants to amend the existing class exemption, commonly known as the settlement class exemption, from the prohibited transaction restrictions of ERISA. The amendment would allow plans to use currently non-qualifying employer securities such as warrants and stock rights in litigation settlements, including bankruptcy proceedings. The department said it is proposing the amendment because it recently received a number of informal inquiries involving litigation in which a plan and its participants are shareholders. In many securities fraud cases, a plan may also have an action against the same parties for ERISA violations. “Given the rise in the number of cases in which plans are involved, either as individual litigants or members of the class action, the department has determined that it would be appropriate to provide an exemption for parties in interest to order to facilitate the settlement of litigation with plans,” the department said. |
|
|
