WGBC helps client finalize settlement in long-running class-action matter – fiduciaries agree to pay over $124 Million to settle claims

White, Graham, Buckley & Carr recently helped finalize a substantial financial settlement on behalf of several former employees of DST Systems in a class action lawsuit. The firm first filed the long-running case in 2017, claiming violations of the Employee Retirement Income Security Act (ERISA) in relation to an investment in the firm’s 401(k) profit-sharing plan.

The original suit was filed in 2017 by a former employee (and participant) of DST Systems, Inc. who had asserted breach of fiduciary duty claims against certain fiduciaries of the DST plan related to overconcentration of the stock of Valeant Pharmaceuticals International Inc. n/k/a Bausch Health Companies Inc. (“Valeant” or “VRX”) in the plan’s profit-sharing account, “as well as other conduct.” According to this suit—and several that followed[i]—the DST 401(k) plan lost tens of millions of dollars when Valeant’s stock price dropped by nearly 90% during 2015 and 2016, and the fiduciaries failed to appropriately diversify the plan’s assets.

After a federal judge dismissed the nationwide lawsuit in 2017, four Kansas City-area law firms, including WGBC, teamed up to take on DST in arbitration. After a success rate of nearly 90% of the first 385 cases presented to arbitrators, A federal judge in the Western District of Missouri confirmed the first 177 arbitration awards, but a federal judge in New York ruled the arbitrations should be stayed and indicated the awards could be invalid.

Both rulings were appealed to higher courts.

While several appeals were pending, WGBC played an integral role in negotiating a “global settlement”  in the New York matter. As part of the agreement, the firm’s clients were also awarded attorneys’ fees, and all other claims, including those in the Missouri federal court, were dismissed.  Eventually, DST and the remaining fiduciaries agreed to pay $124.6 Million to resolve all of the claims asserted by the individual arbitration claimants and all of the separate claims asserted by other parties in cases pending in New York.  Overall, over 9,000 people are affected by the settlement and all of the arbitration claimants represented by WGBC recovered in the settlement.