Description: Action alleging that coal company breached fiduciary duties in connection with employee pension plans by retaining stock in company.
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Lynn v. Peabody Energy Corp.
Case Documents:
Filing Date Type File Action Taken Summary 03/30/2017 Memorandum Download Action dismissed. Missouri Federal Court Dismissed ERISA Class Action Against Peabody Energy. The federal district court for the Eastern District of Missouri dismissed a class action under the Employee Retirement Income Security Act of 1974 (ERISA) that had been brought against the coal company Peabody Energy Corporation (Peabody) and related entities and individuals. The court concluded that the plaintiffs, who were participants in Peabody employee stock option plans, had failed to state a claim that the defendants breached their duty of prudence under ERISA by retaining and continuing to purchase Peabody stock in light of public information that established that doing so was unreasonable. The court also found that the plaintiff’s “nonpublic information” claim—based on Peabody’s allegedly deceptive representations regarding the future of coal—failed because the plaintiffs had not established that a prudent fiduciary could not have concluded that alternatives to continued investment in Peabody stock would do more harm than good. 06/07/2016 Order Docket text order issued. The court dismissed the action without prejudice against Peabody Energy Corporation, Peabody Holding Co. and Peabody Investment Corporation after they filed for bankruptcy, but the action remained pending against the Peabody Energy board of directors. 06/11/2015 Complaint Download Complaint filed. Class Action Complaint Alleged That Peabody Energy Breached Fiduciary Duties for Employees’ Pension Plans. A representative participant in the employee pension plan of Peabody Energy Corporation (Peabody) filed a class action complaint against the company alleging breaches of fiduciary duty pursuant to the Employee Retirement Income Security Act (ERISA). The plaintiff asserted that the defendants retained Peabody stock as investment options in the plans when a reasonable fiduciary would have done otherwise. The complaint alleged that defendants should have known that the pension plan’s investments in Peabody stock were imprudent because of the “sea-change” in the coal industry. Causes of this “sea-change” cited in the complaint included the regulation of carbon dioxide emissions from power plants.