Frequently Asked Questions Related To This Settlement
1. Am I being sued?
No, you are not being sued.
2. Why did I get a notice package in the mail?
You or someone in your family are or may have been a participant in the Sears 401(k)
Savings Plan (which has been renamed the Sears Holding 401(k) Savings Plan) (the
"Plan"), at any time during the period January 17, 2002 through and including October
10, 2006. If you fall within this group, you have a right to know about the Settlement
and all the options available to you regarding the Settlement before the Eastern
Division of the United States District Court for the District of Illinois (the "Court")
decides whether to approve the Settlement and any award of attorneys' fees and expenses
and named plaintiff contributions.
3. What is the Action about?
In this Action, Plaintiffs claimed that Defendants breached their fiduciary duties
under the Employee Retirement Income Security Act of 1974 ("ERISA") by continuing
to allow the investment of the Plan's assets in Sears common stock during the Class
Period at a time when, according to Plaintiffs, Sears common stock was an imprudent
investment for the Plan. Specifically, it is alleged that Sears Common stock was
imprudent because of material problems involving Sears' credit card division, including
an increased risk of customer credit card defaults and inadequate reserves for uncollectible
credit accounts. Plaintiffs also allege that Defendants violated ERISA by, among
other things, providing misleading, incomplete, and inaccurate statements to participants
of the Plan regarding the Company's operational and financial results; failing to
properly monitor and provide material information to the Investment Committee; allowing
fiduciary breaches of their co-fiduciaries; failing to avoid or remedy inherent
conflicts of interest between their corporate interests and fiduciary responsibilities
to the Plan and their participants.
All of the Defendants, including Sears, Roebuck & Co. ("Sears"), deny they did
anything wrong. If the litigation were to continue, the Defendants would raise numerous
defenses to liability, including but not limited to the following: (1) They were
not fiduciaries of the Plan, or, if they were fiduciaries, their fiduciary duties
did not extend to the matters at issue in the Action; (2) Sears common stock was
a prudent investment for the Plan and its participants; (3) Defendants fully and
prudently discharged any fiduciary duties under ERISA; (4) Even if they failed to
discharge any duty under ERISA, any such failure did not cause the Plan or its participants
to suffer any loss; and (5) The Plan and its participants did not suffer any loss
by holding Sears stock because the decline in the value of the Sears stock complained
of in the Action was short-lived and nullified by a rebound in the Company's stock
price (6) 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/or to provide a recovery to Class Members. You can learn more about Plaintiffs'
allegations in Plaintiffs' Consolidated Amended Complaint which is available on
this website.
4. How do I know if I am part of the Settlement?
Any person, excluding Defendants, who was a participant and/or beneficiary in the
Plan at any time during the period from January 17, 2002 through and including October
10, 2006 (the "Settlement Class Period") is a member of the Settlement Class. Since
this Action does not allow you to opt out of the Settlement, if you are a member
of the Settlement Class you do not have the right to exclude yourself from the Settlement
in this case. Therefore, you will be bound by any judgments or orders that are entered
in this Action for all claims that were asserted in this case on your behalf, on
behalf of the Plan or otherwise included in the release provided for by the Settlement.
Although you cannot opt out of the Settlement, you can object to the Settlement
and ask the Court not to approve the Settlement or Plaintiffs' counsel's request
for attorneys' fees and expenses or named plaintiff compensation. (See
questions 12-14 for more information.)
5. Why is this Action a class action?
In a class action, one or more persons called class representatives sue on behalf
of people who have similar claims - all of which, by operation of law - brought
derivatively on behalf of the Plan itself. All of these people who have similar
claims make up the class and are referred to individually as class members. One
court/action resolves the issues for all class members. Because the Plaintiffs believe
that the wrongful conduct they allege affected a large group of people in a similar
way, Plaintiffs filed this case as a class action.
6. What does the Settlement provide for me and other members of
the Class?
The Defendants agreed to create a Settlement Fund of $14.5 million to be divided
among eligible Class Members after compensation payments to Co-Lead Counsel and
the Named Plaintiffs, reimbursement of litigation costs to Co-Lead Counsel, and
payment of other costs and expenses of the Settlement. The Settlement
Agreement, available at: SearsERISASettlement.com
describes the details of the proposed Settlement. This 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.
7. How can I get my payment?
If the Court approves the Settlement, at some point thereafter, if you are eligible
to receive a portion of the Settlement, a distribution of your share of the Settlement
proceeds will be made to your plan account if you are a class member and a current
plan participant. If you are a class member and no longer participate in the plan,
an account will be created for your share of Settlement proceeds and you will be
notified by mail of the creation of such an account.
If you are a former participant and you have not provided the Plan Administrator
or Sears with your current address, please email your current address along with
your previous address to: SearsERISASettlement@sbtklaw.com
or call, toll-free, (866) 828-2487.
8. How much will my payment be?
In general, your proportionate share of the Net Settlement Fund will be calculated
as follows:
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.
9. How will I receive my payment?
You do not need to file a claim. If you are a Settlement Class member and a current
Participant in the Plan, then your share of the Net Settlement Fund will be calculated
and deposited in your Plan account pursuant to the Plan of Allocation. If you are
a Settlement Class member and a former Participant in the Plan, a new account will
be created for you and your share of the Net Settlement Fund will be calculated
and deposited in your new account pursuant to the Plan of Allocation. You will be
notified, by mail and/or through Plan communications, if you are entitled to a portion
of the Settlement. As noted above, if you are a former Participant and you have
not provided the Plan Administrator or Sears with your current address, please email
your current address along with your previous address to:
SearsERISASettlement@sbtklaw.com or contact Plaintiff's Counsel at (866) 828-2487.
10. Do I have a lawyer in this case?
The Court has appointed the law firms Schiffrin Barroway Topaz & Kessler, LLP,
Stull, Stull & Brody and Lerach Coughlin Stoia Geller Rudman & Robbins LLP
as Co-Lead Class Counsel for the Named Plaintiffs in the Action. You will not be charged
directly by these lawyers. If you want to be represented by your own lawyer, you
may hire one at your own expense.
11. How will Class Counsel be paid?
At the Final Fairness Hearing, the Court will rule on Co-Lead Counsel's application
for award of attorneys' fees of not more than 30% of the Settlement Fund and reimbursement
for out-of-pocket expenses in this litigation. The attorneys' fees and reimbursement
of expenses will be paid out of the Settlement Fund. To date, Class Counsel have
not received any payment for their services in prosecuting this Action on behalf
of the Settlement Class, nor have counsel been reimbursed for their out-of-pocket
expenses.
12. Can I exclude myself from the Settlement Class?
You do not have the right to exclude yourself from the Settlement. The Action was
conditionally certified under Federal Rule of Civil Procedure 23(a) and (b)(1) as
a non "opt-out" class action because the Court preliminarily determined the requirements
of the rule were satisfied. This case was brought by the Named Plaintiffs as a "representative"
action on behalf of the Plan itself for Plan-wide losses - as well as on behalf
of a class of Plan participants. Thus, it is not possible for any participants or
beneficiaries to exclude themselves from the benefits of the Settlement. As a Class
Member, you will be bound by any judgments or orders that are entered in the Action
for all claims that were or could have been asserted in the Action or are otherwise
included in the release under the Settlement.
13. What does it mean to object to the Settlement?
Although you cannot opt out of the Settlement, you can object to the Settlement
and ask the Court not to approve it. You can tell the Court if you do not agree
with the Settlement or some part of it, or if you do not believe the Court should
grant Co-Lead Counsel's application for attorneys' fees and reimbursement of expenses
or Named Plaintiff compensation. Objecting is simply telling the Court that you
do not like something about the Settlement or the request for attorneys' fees and
reimbursement of expenses or Named Plaintiff compensation. Filing an objection will
not have any bearing on your right to Settlement benefits if the Court approves
the Settlement.
14. How can I tell the Court that I do not like the Settlement?
If you are a Class Member, you can object to the Settlement if you do not like any
part of it. You can give reasons why you think the Court should not approve it or
any application for attorneys' fees and expenses or Named Plaintiff compensation.
To object, you must send a letter or other written filing saying that you object
to the Settlement in In re Sears, Roebuck & Co.
ERISA Litigation, No. 02 C 8324. Be sure to include your name, address,
telephone number, signature, and a full explanation of all reasons you object to
the Settlement. Your written objection must be mailed to the Clerk of the Court
and all attorneys listed on page 6 of the Notice and must be postmarked by no later
than May 7, 2007.
15. May I speak at the Fairness Hearing regarding the Settlement?
The Court will hold a Fairness Hearing on May 24, 2007 at 9:00 a.m. in the Courtroom
of Judge John W. Darrah, United States District Court for the Northern District
of Illinois, Eastern Division, 219 S. Dearborn Street, Chicago, Illinois 60604 to
decide whether to approve the Settlement, Class Counsel's motion for attorneys'
fees and request for Named Plaintiff compensation. You may attend and you may ask
to speak, but you are not required to do so.
If you would like to ask the Court for permission to speak at the Fairness Hearing
you must send a letter or other paper called a "Notice of Intention to Appear at
Fairness Hearing in In re Sears, Roebuck & Co.
ERISA Litigation, No. 02 C 8324." Be sure to include your name, address,
telephone number, and your signature. Your "Notice of Intention to Appear" must
be served on the attorneys and Clerk of Court listed on page 6 of the Notice and
postmarked no later than May 7, 2007.
16. How do I receive a copy of the Settlement Notice?
Copies of the Notice were mailed out to the last known address of all persons who
were participants in or beneficiaries of the Sears 401(k) Savings Plan at any time
during the period from January 17, 2002, through and including October 10, 2006.
If you would like to review the Notice please click on the link for the Long Form
Notice (insert link to Notice). To request a Notice, call (866) 828-2487.
17. What if I have additional questions?
If you have additional questions regarding this case, please
send an email to: SearsERISAsettlement@sbtklaw.com. This email will go
to the law office of one of the three Co-Lead Counsel, Schiffrin Barroway Topaz
& Kessler, LLP, and be directed to the individuals handling the
Settlement. Class Counsel has also set
up a toll free number, (866) 828-2487, if you
prefer to call with your questions.
