Yesterday, November 5, 2015, the parties in Spano v. Boeing Co. filed for court approval of a Settlement Agreement that was finally made public. Earlier this year in August, the case was settled in principle on the first day of trial but the terms of the settlement were not disclosed.
We have now learned that the defendants have agreed to a $57 million payment. Schlichter, Bogard, & Denton, attorneys for the plaintiffs, with court approval will receive $19 million in attorney’s fees and $1,845,000 in costs. (For a review of the claims at issue in the case, see our earlier post Court in Boeing Excessive Fee Case Rules for Plaintiffs, Sets Trial Date.)
The following are some selected terms of the settlement:
- The plaintiffs agreed to a sweeping release of claims.
- Boeing agreed to hire an independent fiduciary to approve the settlement, assumed in the settlement agreement as Gallagher Fiduciary Advisors unless another is agreed to by the parties.
- If a technology sector strategy fund remains as a core option in the Plan, Boeing shall obtain an opinion and recommendation of an Independent Investment Consultant on the question of whether and how to provide participants access to a technology sector strategy as a core option. The Independent Investment Consultant is assumed as Mercer, Aon Hewitt or Towers Watson under the settlement agreement unless another is agreed to by the parties.
- The agreement acknowledged that Boeing has a cash target for their company stock fund, and have hired a fiduciary to monitor the cash levels.
- The remaining amounts in the settlement fund after paying for attorneys fees and costs and other costs associated with the settlement, will be allocated as follows:
- 50% to the Recordkeeping Class
- 20% to the Mutual Fund Sub-Class
- 15% to the Technology Fund Sub-Class
- 10% to the Company Stock Fund Sub-Class; and
- 5% to the Small Cap Fund Sub-Class.
This is a very significant settlement for the plaintiffs in this case, as it is second in gross amount only to the settlement of the Lockheed Martin excessive fee case earlier this year. One notable thing different about this agreement, however, is the lack of substantial affirmative relief that is normally agreed to by the defendants in such a suit. The settlement agreement does not explain why it is missing.