Welcome to the WaMu Savings Plan ERISA Settlement website. This website is designed to keep class members informed regarding the ERISA Class Action Settlement that has been preliminarily approved in In Re Washington Mutual, Inc. Securities, Derivative and ERISA Litigation. While the District Court has approved the Notice of Proposed Settlement and ordered that certain documents filed with the Court be posted on this website, the content of this website is the responsibility of Plaintiffs’ Class Counsel, and has not been approved by the Court.
Background
Beginning on November 20, 2007, several putative class actions were filed on behalf of participants in or beneficiaries of the WaMu Savings Plan (“Plan”) whose accounts included investments in Washington Mutual common stock. These actions alleged breaches of fiduciary duty in violation of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”).
On May 7, 2008, the Honorable Marsha J. Pechman consolidated the various pending ERISA cases. Then, on May 20, 2008, Judge Pechman appointed Keller Rohrback L.L.P. and Hagens Berman Sobol Shapiro LLP (“Plaintiffs’ Class Counsel”) as Interim Co-Lead Counsel in the ERISA Action to manage the prosecution of the case on behalf of the putative class.
On August 5, 2008, Plaintiffs Gregory Bushansky, Dana Marra, and Marina Ware (collectively, “Named Plaintiffs”) filed a Consolidated Amended Complaint on behalf of all persons, other than Defendants, who were participants in or beneficiaries of the Plan, and whose accounts included investments in Washington Mutual common stock during the proposed Class Period.
On February 18, 2009, Named Plaintiffs filed a Consolidated Second Amended Complaint (the “Complaint”), seeking relief on behalf of a proposed class of persons who were participants or beneficiaries of the Plan who invested in Washington Mutual common stock through their Plan account during the proposed Class Period. The Complaint alleges that the Plan’s fiduciaries violated their fiduciary duties under ERISA by: (1) failing to prudently and loyally manage the Plan’s assets; (2) failing to monitor fiduciaries; (3) failing to disclose necessary information to co-fiduciaries; (4) failing to provide complete and accurate information to the Class; (5) co-fiduciary liability; and (6) knowingly participating in a fiduciary breach.
Named Plaintiffs allege that Defendants knew or should have known that the Plan’s investment in Washington Mutual common stock was not a prudent retirement investment and that Defendants acted imprudently by not preventing further investment in Washington Mutual common stock and not liquidating those holdings.
On April 27, 2009, Defendants moved to dismiss the Complaint. Named Plaintiffs’ filed their opposition to Defendants’ motion to dismiss on June 12, 2009 and Defendants’ filed their reply on July 6, 2009.
On October 5, 2009, the Honorable Marsha J. Pechman issued an order in which she granted in part and denied in part the Defendants’ Motions to Dismiss. The order allowed Plaintiffs to proceed with the lawsuit against the Plan Investment Committee (“PIC”) Defendants, the Plan Administration Committee (“PAC”) Defendants, and the Human Resources Committee (“HR”) Defendants named in the Consolidated Second Amended Complaint.
The Settlement Class
On August 6, 2010, Judge Pechman preliminarily approved the ERISA Settlement on behalf of everyone who, subject to certain exceptions identified below, fits the following description:
All persons who were participants in or beneficiaries of the Plan at any time between October 19, 2005 and September 26, 2008, both dates inclusive, and whose individual Plan accounts included investment in Washington Mutual common stock; provided, however, that Defendants and their heirs, Successors-in-Interest, or assigns, to the extent they acquire an interest held by Defendants, are excluded from the Settlement Class.
The Settlement
The Court has not decided in favor of Named Plaintiffs or Defendants. Instead, Named Plaintiffs and Defendants have agreed to a settlement to resolve the ERISA Action. In reaching the Settlement, they have avoided the cost and time of a trial. As with any litigation, Named Plaintiffs would face an uncertain outcome if this case proceeded, including the risk of dismissal upon future motions as well as the risk of not prevailing at trial.
Pursuant to the Settlement Agreement a Settlement Fund has been established consisting of a deposit of $49,000,000.00 in cash paid by insurers of certain Defendants, plus interest earned thereon.
The Net Settlement Amount will consist of the Settlement Fund less certain amounts described in the Settlement Agreement, including Court-approved attorneys’ fees and expenses and Named Plaintiffs’ service awards, and will be allocated among the Settlement Class in accordance with the Plan of Allocation to be approved by the Court.
The District Court has scheduled a hearing to evaluate the fairness and adequacy of the Settlement. At the Fairness Hearing, to be held November 5, 2010, at 3:30 p.m., the Court will consider Named Plaintiffs’ requests for final approval of the Settlement, for class certification, for approval of a proposed plan of allocation, for an award of attorneys’ fees and expenses, and for service awards to Named Plaintiffs. Any objection to the Settlement must be filed with the Court, and served upon the counsel listed in the Notice of Proposed Settlement by no later than October 22, 2010.
Settlement FAQ:
Q: How do I know whether I am part of the Settlement Class?
The District Court has preliminarily certified this ERISA Action as a class action. The Settlement Class consists of all persons who were participants in or beneficiaries of the Plan at any time between October 19, 2005 and September 26, 2008, both dates inclusive, and whose individual Plan accounts included investment in Washington Mutual common stock; provided, however, that Defendants and their heirs, Successors-in-Interest, or assigns, to the extent such persons acquire an interest held by Defendants, are excluded from the Settlement Class.
If you are a member of the Settlement Class, your share of the Net Settlement Amount, if any, will be determined by the Plan of Allocation to be approved by the District Court, and as described in Section 8 of the Notice of Proposed Settlement.
Q: What is the Bankruptcy Court’s involvement?
On September 26, 2008, Washington Mutual, Inc. (“WMI”) and WMI Investment Corp. filed for bankruptcy in the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”), and their cases are being jointly administered in the Bankruptcy Court as In re Washington Mutual, Inc., et al., Case No. 08-12229 (MFW) (the “Chapter 11 Cases”). As a result of the Chapter 11 Cases, all claims against WMI in the ERISA Litigation were put on hold. Following the filing of the Chapter 11 Cases, Named Plaintiffs filed a claim against WMI in its Chapter 11 Case with respect to the claims asserted in the ERISA Litigation. Because WMI is in bankruptcy, and because the settlement includes the release of plaintiffs’ claim in the bankruptcy case and involves the depletion of Washington Mutual insurance policies, the settlement needs to be approved by the Bankruptcy Court.
Q: How much will I get?
On June 18, 2010, Class Counsel submitted a Plan of Allocation to the District Court for approval at or after the Fairness Hearing. The Plan of Allocation describes how the Net Settlement Amount will be distributed to Settlement Class members. In general terms, the Plan of Allocation will provide that each Settlement Class member’s share of the Net Settlement Amount will be calculated as follows:
The Net Settlement Amount will be distributed among Settlement Class members in proportion to their Net Losses. Each Settlement Class member’s Net Loss will be the total of the member’s Washington Mutual Common Stock Fund Net Loss, which will be, for each Settlement Class member, the greater of (a) zero, or (b) the result obtained by (i) taking the dollar amount of the Settlement Class member’s Plan account invested in the Washington Mutual Common Stock Fund at the beginning of the Class Period; (ii) adding the dollar amount added to the Settlement Class member’s Plan account invested in the Washington Mutual Common Stock Fund during the Class Period; (iii) subtracting the dollar amount credited to the Settlement Class member’s Plan account resulting from sales from the Washington Mutual Common Stock Fund during the Class Period; and (iv) subtracting the dollar amount of the Settlement Class member’s Plan account balance in the Washington Mutual Common Stock Fund immediately after the end of the Class Period.
The Net Losses of the Settlement Class members will be added. Each Settlement Class member will be assigned a Net Loss Percentage, reflecting the percentage of the Settlement Class member’s loss in relation to the losses incurred by all Settlement Class members. Each Settlement Class member’s share of the Net Settlement Amount will be equal to the Net Settlement Amount multiplied by the Settlement Class member’s Net Loss Percentage.
Chase will perform all calculations and determine whether you are entitled to a share of the Net Settlement Amount and your share amount. Chase will have access to all available records so you do not need to be concerned if you no longer have your Plan account statements. Chase will identify all Settlement Class Members whose Preliminary Dollar Recovery is less than $25. These Settlement Class Members will not receive money from the Net Settlement Amount, and the recovery otherwise allocable to them will be reallocated among the other Settlement Class Members.
Q: When can I expect to receive my payment?
Payment is conditioned on several things, including the District Court’s and the Bankruptcy Court’s approval of the settlement and those approvals becoming Final Orders and no longer subject to any appeals. Depending on the court process, distribution could take several months or more than a year; please be patient.
If you have any questions about the WaMu Savings Plan ERISA Settlement, please send an email to info@WaMu401kSettlement.com. This email will be directed to the individuals handling the Settlement. Plaintiffs’ Class Counsel have also set up a toll free number 1-(800) 269-0794, if you prefer to call with your questions.
www.kellersettlements.com/wamusavinga.html
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