Alston & Bird client Evercore Trust Company, the independent fiduciary of benefit plans sponsored by American International Group (AIG), won a major decision when the U.S. Court of Appeals for the Second Circuit ruled that four AIG plans can share in a $725 million securities settlement between AIG and its investors.
The ruling partly reverses a 2014 decision by the U.S. District Court for the Southern District of New York denying the plans a share of the settlement because they were “affiliates” of AIG and thus specifically excluded from participating in the settlement agreement.
"Because ERISA imposes important statutory limits on an employer's control over the management and policies of an employee benefit plan, those plans do not fall within the ordinary meaning of 'affiliate,'" U.S. Circuit Judge Rosemary Pooler wrote for the three-judge panel. "Thus, appellants are entitled to their own slice of the settlement pie and appellees will have to live with a somewhat smaller portion."
In so holding, the Second Circuit expressly declined to follow, and created a split with, the Seventh Circuit on certain issues.
Representing Evercore Trust in the matter are partners Doug Hinson and Jonathan Rose and senior associate Richard Siegel (ERISA Litigation).
The case is In re Am. Int’l Grp., Inc. Sec. Litig. (Rothstein v. Am. Int’l Grp., Inc.), 2016 BL 308876, 2d Cir., No. 14-4067-cv-L).