The parties to this action – the Plaintiffs, on behalf of themselves and the Lump Sum Class and the Restricted Participant Class (defined below), and Defendants Avnet, Inc. (“Avnet”) and the Avnet Pension Plan (“Plan”) (collectively, “Defendants”) – have reached an agreement to settle a lawsuit filed in 2007 challenging the way between 1994 and August 17, 2006 Defendants calculated the lump sum payouts, or potential lump sum payouts, of the pension benefits earned by a total of about 4,500 former Avnet, Inc. employees.
Under the agreement, Defendants will pay a total of $34 million, consisting of $29 million in gross consideration to the Lump Sum Class (which is comprised of approximately 3,470 Class members) and $5 million in gross consideration to the Restricted Participant Class (which is comprised of approximately 976 Class members), to be distributed according to Plans of Allocation to be established by the Court.
However, the settlement itself will only become effective if finally approved by the Court. This website, created by Class counsel, is designed to help Class Members understand the proposed settlement, review copies of the relevant documents, and decide whether they believe it is fair, reasonable and adequate under the circumstances and should be approved.
Court approval of a class action is a two-step process. First, there is “preliminary approval” by the Court which depends on a showing that the settlement is within the range of reasonableness, sufficient to send notice to the Class. In his Order of November 25, 2009,the Honorable Frederick J. Martone granted preliminary approval of the proposed settlement and recommended plans of allocation, and authorized Mailed Notice to be sent to members of the two Classes and Publication Notice to be published in USA Today.
The second step of the settlement process is the “final approval” stage. In his Order of November 25, 2009,
Judge Martone set the final approval hearing for March 5, 2010 at 2:00 p.m. In the final approval phase of a proposed class action settlement, the Court takes a much closer look and issues a definitive decision as to whether the proposed settlement is fair, reasonable and adequate. At the same time, the Court rules on Class counsel’s request for attorney’s fees and any case contribution payments requested, as will be the case here, for the named plaintiffs for service to the Classes.
We will update this site as soon as we have further information from the Court or other information to convey to members of the Classes.
In exchange for releases of all claims that were brought or could have been brought via the instant action, Defendants would create two settlement funds to be funded by a combined gross amount (“Total Settlement Amount”) of $34 million. The “Lump Sum Class Settlement Fund,” to be created on behalf of the Lump Sum Class, would consist of a gross settlement amount of $29 million. The “Restricted Participant Class Settlement Fund,” to be created on behalf of the Restricted Participant Class, shall consist of a gross settlement amount of $5 million.
The Net Settlement Benefit available to the Lump Sum Class will equal $29 million minus the following deductions: court-approved attorneys’ fees and expenses (proportionate to the $29 million/$5 million division of the $34 million Total Settlement Amount), named plaintiff case contribution payments, and settlement administration costs. The Net Settlement Benefit available to the Restricted Participant Class will equal $5 million minus the following deductions: court-approved attorneys’ fees and expenses and named plaintiff case contribution payments. These deductions are each subject to Court approval.
Assuming the maximum deductions possible, the Lump Sum Class’ Net Settlement Benefit would be approximately $21.3 million, and the Restricted Participant Class’ Net Settlement Benefit would be approximately $3.67 million.
The next step in determining the individual net settlement benefit to be paid to each Class Member would be a pro rata calculation, based on the net settlement proceeds available, multiplied by the ratio that the individual’s alleged underpayment (or, in the case of Restricted Participants, the amount due in excess of their notional account balances if they were to now elect lump sums) bears to an aggregate of underpayments (or amounts due in excess of account balances). Counsel believes, however, that this pro rata distribution should be proceeded by a division of the two Classes into subgroups of participants based on the relative strength of their claims as against Defendants’ key defenses, and a weighting of each Classes’ Net Settlement Benefits accordingly. The recommended Plans of Allocation are designed with this in mind, i.e., that Class Members with relatively stronger claims are entitled to proportionately higher settlement benefits.
For the Lump Sum Class, Class Counsel propose that the Net Settlement Benefit be allocated by reference to four subgroups, defined according to the most significant statute of limitations defenses that Avnet and the Plan asserted against Lump Sum Class Members.
For the Restricted Participant Class, Class Counsel propose that the Net Settlement Benefit be allocated by reference to two subgroups, defined according to the relative difficulty Class Members would have had overcoming one of the key defenses asserted by Defendants: lack of causation and/or lack of injury. The two subgroups Counsel proposes the Court recognize for purposes of the recommended allocation are: the “Inquiry” Subgroup and the “Non-Inquiry” Subgroup. The Inquiry Subgroup consists of those Class Members who, according to records maintained by the Plan, inquired about receiving a benefit distribution from the Plan at any time between January 1, 1994 and August 17, 2006, and before their 65th birthday. The Non-Inquiry Subgroup consists of those Class Members for whom there is no record of any such inquiry.