In re AOL Time Warner ERISA Litigation, 02-cv-8853 (S.D.N.Y.)
Kessler Topaz served as co-lead counsel on behalf of a class of participants and beneficiaries of the 401(k) plans offered by AOL Time Warner (the “Plans”) for whose individual accounts the Plans purchased and/or held interests in the AOL Time Warner Stock Fund alleging violations of the fiduciary duties of loyalty, care and prudence owed under the provisions of the Employee Retirement Income Security Act (“ERISA”). Plaintiffs alleged that Time Warner and other fiduciaries of the Plans violated ERISA by, among other things, (1) failing to prudently manage the assets of the Plans, (2) failing to provide required disclosures to the participants and beneficiaries of the Plans, and (3) failing to properly appoint, monitor and inform other fiduciaries of the Plans. Specifically, Plaintiffs alleged that Defendants knew or should have known that AOL Time Warner stock was not a prudent investment as it had become artificially inflated as a result of materially false and misleading statements by senior management concerning revenue and earnings. Further, Plaintiffs alleged that Defendants acted imprudently by failing to prevent further investment in AOL Time Warner Stock and not liquidating the Plan’s AOL Time Warner common stock holdings. After several years of hard-fought litigation and lengthy settlement negotiations, the case settled for $100 million.