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US Airways
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Approximately six weeks before USAirways
filed for bankruptcy, Fiduciary Counselors was retained as independent fiduciary
for the USAirways Stock Fund which was an investment option in USAirway's
four 401(k) plans and for the USAirways ESOP. Fiduciary Counselors first
action was to direct the trustee to stop purchasing USAirways stock. Over
the six weeks before the bankruptcy filing, Fiduciary Counselors sold USAirways
stock increasing the cash portion of the Stock Fund from 10 to 25 percent.
By the time USAirways stock resumed trading after the bankruptcy filing,
Fiduciary Counselors had worked with the trustee to transfer the cash portion
into the default option in each plan and notified participants that the
funds were available for reinvestment.
Fiduciary Counselors represented the interest of plan participants in the
bankruptcy proceeding, obtaining consent to continue selling USAirways stock
during the bankruptcy despite a bankruptcy order prohibiting such sales
and attempting to win approval for an equity committee.
Under SEC rules, Fiduciary Counselors was limited in the amount of stock
it could sell but these limits did not apply to participant-directed sales.
Fiduciary Counselors sent letters to participants warning them that the
stock was likely to be cancelled to encourage them to sell before the plan
of reorganization was confirmed. |
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Some articles about the
transaction: |
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“Airline names fiduciary for company
stock plans” by Craig Gunsauley, September 1, 2002, BenefitNews.com |
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“Stock adviser's moves spared workers worst of
bankruptcy” Pittsburgh Post-Gazette, August 14, 2002 |
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© 2008 Fiduciary Counselors Inc.
All rights reserved. |
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