Welcome to the In re Sears, Roebuck and Co. ERISA Litigation Website.
This website is designed to keep Class Members informed about the In re Sears, Roebuck
and Co. ERISA Litigation No. 02-C-8324 (“Settlement”).
SETTLEMENT DISTRIBUTION IS COMPLETE
We are pleased to announce that, as of October 30, 2007, the Authorized Administrator has completed the process of distributing
each Class Member’s portion of the Settlement to their individual plan accounts. Sears will be sending
Settlement distribution notification to current Plan participants in the near future. Class Members
who are eligible for a portion of the Settlement proceeds and no longer participate in the Sears
401(k) Plan have had accounts created by the Authorized Administrator. These accounts were
created specifically to receive the deposit of each Settlement Class Member/former participant’s
portion of the Settlement Fund proceeds. Notification of these newly created accounts will be
sent by mail, along with further instructions and information related to the account.
SETTLEMENT FINAL AND EFFECTIVE
We are pleased to announce that the appeals period in
this matter has expired with no appeal being filed. As such, the Settlement has become
Final. The process of implementing the Court-approved Plan of Allocation is now underway.
Kindly be advised that the calculations associated with this process can take several
months. Please be patient. In the interim, continue to visit this website for
additional updates regarding the Settlement and distribution.
COURT APPROVES SETTLEMENT:
We are pleased to announce that on June 26, 2007, the Honorable John W. Darrah approved the Settlement of this matter.
Once the appeals period has expired (assuming no appeals are filed) the Settlement will become final. The Plan Administrator will then begin calculating
each Class Member’s portion of the Settlement according to the Plan of Allocation. As always, please continue to visit this website for updates about the
Settlement and allocation of Settlement funds.
Follow these links to view the Order & Final Judgment
, Order Awarding Attorneys’ Fees and Reimbursement of
Expenses and Plaintiffs Case Contribution Awards and Minute Entry.
On May 14, 2003, Michael G. Cheperka, Bill Kehr, Kenneth L. Hawkins and Margaret
Villano (“Named Plaintiffs” or "Plaintiffs”) on behalf of themselves and a class
of current and former participants in the Sears 401(k) Savings Plan [the “Plan”
– which has been renamed the Sears Holdings 401(k) Savings Plan], filed an Amended
Consolidated Complaint for Breach of Fiduciary Duty under the Employee Retirement
Income Security Act of 1974 (“ERISA”) (“Complaint”). In the Complaint, Plaintiffs
claimed, generally, that Defendants breached their fiduciary duties under ERISA
by continuing to allow and maintain a large investment of the Plan’s assets in the
Sears Stock Fund during the relevant time period when they knew or should have known
that such investment was imprudent due to public macroeconmic factors affecting
the retail industry as well as alleged non-public accounting manipulations in the
company’s former credit card division. All of the Defendants, who include Sears,
Roebuck & Co. (“Sears” or the “Company”), Alan Lacy, Paul J. Liska, Glenn Richter,
Thomas E. Bergmann, Greg A. Lee, Hall Adams, Jr., Brenda Barnes, James R. Cantalupo,
Donald J. Carty, W. James Farell, Michael A. Miles, Hugh B. Price, Dorothy A. Terrell
and Raul Yzaquirre, deny they did anything wrong. The Court has not ruled in favor
of either side. Both sides agreed to the Settlement to ensure a resolution, avoid
the cost and risk of continued litigation, and to provide a recovery to Class Members.
This Settlement is the product of extensive negotiations between Named Plaintiffs’
counsel and the Defendants’ counsel, and was mediated by Ret. Judge Nicholas Politan.
The Court has conditionally certified this case as a class action for purposes of
the Settlement. Specifically, the case was conditionally certified under Rule 23(b)(1)
of the Federal Rules of Civil Procedure as a “non opt-out” class action because
of the way ERISA operates. The action, while brought by Plan participants, is a
representative action pursuant to ERISA §§ 409, 502(a)(2) on behalf of the Plan
itself for mismanagement of its assets. Accordingly, it is not possible for any
participants or beneficiaries to exclude themselves from the benefits of the Settlement.
As a Settlement Class member, you will be bound by any judgments or orders that
are entered in this Action for all claims that were or could have been asserted
in the Action or are otherwise included in the release under the Settlement. Class
members include any person who was a participant and/or beneficiary of the Plan
at any time between January 17, 2002, through and including October 10, 2006.
The Defendants agreed to create a Settlement Fund of $14.5 million to be divided
among eligible Class Members, after deduction of: (1) costs and expenses of administering
the Settlement; (2) any award of attorneys’ fees and expenses and (3) compensation
awards by the Court to the Named Plaintiffs. The
Settlement Agreement describes the full details of the proposed Settlement.
All capitalized words used here and not defined have the same meanings given to
them in the Settlement Agreement. The Settlement releases certain claims against
the Company and the individual Defendants for alleged violations of ERISA regarding
the investment of the Plan’s assets in Company stock during the Class Period.
If the Court approves the Settlement, at some point thereafter, if you are Class
member and eligible to receive a portion of the Settlement, a distribution of your
Settlement proceeds will be made to your Plan account if you are a current Plan
participant. If you are a Class Member and no longer participate in the Plan, a
new account will be created for you and your share of the Settlement proceeds will
be deposited in that account. You will be notified by mail with further information
when this occurs.
Your share of the Settlement Fund will depend on whether or not your Plan account
suffered a net loss during the Class Period. Your share of the Net Settlement Fund,
however, will be less than your actual losses. You are not responsible for calculating
the amount you may be entitled to receive under the Settlement -- this calculation
will be done as part of the implementation of the Settlement. Your Settlement amount
will be calculated in accordance with a Court-approved Plan of Allocation.
On March 2, 2007 the Court issued an order granting preliminary approval of the
Settlement. At a “Final Fairness Hearing,” to be held on May 24, 2007 at 9:00 a.m.,
the Court will decide whether to finally and fully approve the Settlement. The Court
will also decide whether to grant any application by Plaintiffs’ Counsel for an
award of attorneys’ fees, reimbursement of expenses and Named Plaintiff Case Contribution
Awards, which will be paid out of the Settlement Fund. To date, Class Counsel have
not received any payment for their services in prosecuting this lawsuit on behalf
of the Settlement Class, nor have Class Counsel been reimbursed for their out-of-pocket
expenses.
If you would like to attend the hearing you must file a “Notice of Intention to
Appear at Fairness Hearing in In re Sears, Roebuck & Co. ERISA Litigation, No. 02
C 8324”. More information about how to attend the Final Fairness Hearing is on Page
7 of the Long Form Notice. You may
also file an objection to the Settlement or application for attorneys’ fees and
expenses and the request for Named Plaintiff Case Contribution Awards. More information
on how to file an objection is on page 6 of the Long Form Notice. Anyone who wishes
to file a Notice of Intention to Appear at Final Fairness Hearing or an Objection
to the settlement must do so by May 7, 2007.
If you have any questions about the In re Sears, Roebuck & Co. ERISA Litigation,
please send an email to: SearsERISASettlement@sbtklaw.com.
This email will go to the law office of one of Plaintiffs’ Co-Lead Counsel, Schiffrin
Barroway Topaz & Kessler, LLP, and be directed to the individuals handling the Settlement.
Plaintiffs’ Co-Lead Counsel has also set up a toll free number (866) 828-2487, if
you prefer to call with your questions.
