A U.S. District Court will soon decide whether to put its final stamp of approval on a $6.5 million settlement to a class action lawsuit against YRC Worldwide over its handling of worker retirement plans as the trucking company restructured its finances.
The U.S. District Court for the District of Kansas will hold a fairness hearing March 6 to determine whether the proposed settlement is “fair, reasonable and adequate.” The lawsuit and settlement are part of the aftermath of the $4.3 billion trucking operator’s severe losses in the years prior to its restructuring last July.
Details of the proposed settlement, reached last year, were mailed to class members — salaried and hourly non-union employees of YRC Worldwide — on Jan. 14. Information on the class action lawsuit, including court documents, is available online.
The class action lawsuit, recognized by the court in 2010, claimed YRC Worldwide violated federal law in its management of employee 401(k) retirement plans. The class includes participants in several YRC Worldwide 401(k) plans from Oct. 25, 2007 through June 8, 2011 whose plans included shares of YRCW stock.
The litigation alleged the carrier broke the law by allowing the plans to purchase and hold its stock at a time when it was “unsuitable and imprudent investment.” In the settlement, YRC Worldwide denied any wrongdoing but agreed to the proposed settlement to “eliminate the burden and expense of further litigation.”
YRC Worldwide’s stock value tumbled from 2006 through 2011, when it lost more than $2.5 billion and underwent two debt-for-equity swaps and reverse stock splits. The trucking operator’s stock hit its nadir in December at about 3 cents per share before jumping above $9 a share Dec. 2 after a 300-to-1 reverse stock split.