In Re SunTrust Banks, Inc. ERISA Litigation
1:08-cv-03384-RWS

Frequently Asked Question

 

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  • No, you are not being sued.

  • You or someone in your family is or may have been a participant in the SunTrust Banks, Inc. 401(k) Plan (“Plan”), and invested in SunTrust Stock through an account in the Plan between May 15, 2007 and March 31, 2011, inclusive. The Court ordered the Notice to be sent to you because, if you fall within that group, you have a right to know about the Settlement and about all of your options before the Court decides whether to approve the Settlement. If the Court approves the Settlement, and after any objections and appeals are resolved, the net amount of the Settlement Fund will be paid to the Plan and then allocated among authorized members of the Settlement Class according to a Court-approved Plan of Allocation. The Notice package describes the Action, the Settlement, your legal rights, the benefits available, who is eligible for them, and how to get them.

    The Court in charge of this case is the United States District Court for the Northern District of Georgia. The individuals who sued are called the “Named Plaintiffs,” and the people and entities they sued are called “Defendants.”

  • This Action began in July 2008 when the first lawsuit was filed alleging claims against the fiduciaries of the Plan. On September 2, 2009, after similar lawsuits were filed, the Court consolidated the related actions. In October 2009, the Named Plaintiffs and others filed a First Amended Complaint asserting claims on behalf of participants in or beneficiaries of the Plan whose accounts included an investment in SunTrust Stock at any time during a Class Period that was defined as May 15, 2007 through “the present.” Named Plaintiffs alleged that Defendants were fiduciaries of the Plan and that they breached fiduciary duties owed to the Plan’s participants by, among other things, continuing to permit investment in SunTrust Stock through the Plan and failing to take appropriate action when such investments allegedly became imprudent. Named Plaintiffs also alleged liability for failure to monitor other fiduciary Defendants and co-fiduciary liability. Named Plaintiffs further alleged that because they and other Plan participants invested in SunTrust Stock through the Plan, their retirement accounts lost value. During the litigation, the Court dismissed certain claims and certain defendants. On June 18, 2015, it granted in part, and denied in part, Defendants’ January 29, 2015 motion to dismiss. On August 17, 2016, the Court entered a Class Certification Order certifying a class consisting of participants in or beneficiaries of the Plan at any time between May 15, 2007 and March 30, 2011, inclusive, and whose accounts included investments in SunTrust Stock during that period and who sustained a loss to their account as a result of the investment in SunTrust Stock. On October 5, 2016, the Court granted dismissal of certain defendants.

    The Complaint seeks equitable and compensatory relief pursuant to Sections 409 and 502(a)(2) of ERISA, specifically the restoration by Defendants to the Plan of losses allegedly caused by Defendants’ alleged breaches of fiduciary duties. The Complaint also seeks costs and attorneys’ fees pursuant to Section 502(g) of ERISA and the common fund doctrine.

    In January 2018, Class Counsel and counsel for Defendants mediated the Action under the supervision of Robert A. Meyer, Esq., a mediator experienced in ERISA and other complex class actions. During the full-day mediation, counsel for the Parties conducted extensive, arm’s-length negotiations concerning a possible compromise and settlement of the Action, eventually resulting in the Parties agreeing to a proposed Settlement that was subject to negotiating settlement documentation as well as approval by the Court.

    During January and February 2018, counsel for the Parties negotiated the terms of the Settlement Agreement and related documents. On March 9, 2018, Named Plaintiffs filed a motion seeking preliminary approval of the Settlement as well as seeking related relief.

  • In a class action, one or more plaintiffs called “Class Representatives” sue on behalf of a number of people who have similar claims. All of the individuals on whose behalf the Class Representatives are suing are “Class Members.” One court resolves the issues for all Class Members. In its Order scheduling the Fairness Hearing, the Court preliminarily certified the Settlement Class in the Action. The Class Representatives in this Action are Named Plaintiffs Dennis Erwin, William Fisch, Chrys Trau, and Donna Smothermon, who were participants in the Plan during the Class Period, and are referred to in the Notice as the “Named Plaintiffs.”

  • The Court has previously certified that this Action, and accordingly, this Settlement, shall proceed on behalf of everyone who, subject to certain exceptions identified below, fits the following description:

    All persons, other than Defendants and members of their immediate families, who were participants in or beneficiaries of the SunTrust Banks, Inc. 401(k) Savings Plan (the “Plan”) at any time between May 15, 2007 and March 30, 2011, inclusive (the “Class Period”) and whose accounts included investments in SunTrust common stock (“SunTrust Stock”) during that time period and who sustained a loss to their account as a result of the investment in SunTrust Stock (the “Settlement Class”).

    Please note that while the official name of the Plan is the SunTrust Banks, Inc. 401(k) Plan, during the litigation, the Plan was sometimes referred to as the SunTrust Banks, Inc. 401(k) Savings Plan.   For purposes of this Settlement, these names both refer to the 401(k) plan sponsored by SunTrust Banks, Inc.

  • Defendants shall deposit Four Million Seven Hundred Fifty Thousand U.S. Dollars ($4,750,000.00) not later than ten (10) calendar days following the Court’s preliminary approval of the Settlement or Named Plaintiffs’ counsel providing Defendants’ counsel with wire transfer instructions, whichever is later, into an interest-bearing escrow account (the “Escrow Account”) at a financial institution (the “Escrow Agent”) identified by Class Counsel and consented to by Defendants. The net amount in the Escrow Account, after payment of Court-approved attorneys’ fees and expenses, the Case Contribution Awards and other administrative expenses associated with the Settlement (the “Net Settlement Fund”), will be allocated to members of the Settlement Class according to a Plan of Allocation to be approved by the Court if and when the Court enters an order finally approving the Settlement.

    As part of the Settlement, Defendants are also required to provide certain non-monetary relief. During this litigation, the Company Stock Fund was frozen on February 1, 2016. The freeze will continue such that no new contributions are permitted. Additionally, there will be immediate vesting of Company contributions for participants whose date of hire is on or before December 31, 2010; all participants whose date of hire is on or after January 1, 2011 (or who resume employment after that date and are not previously vested) shall be 100% vested in his/her matching account balance on the earlier of (i) the date he/she has completed two (2) years of vesting service regardless of his/her age, (ii) has incurred a disability, or (iii) on his/her date of death; the preceding vesting schedules will not be decreased for at least three years. Moreover, all matching contributions will be funded in cash for at least the next three years, and the Plan’s fiduciaries will receive enhanced training.

    Defendants have agreed to pay all of the fees, expenses, and costs incurred to provide this non-monetary relief, which is further described in the Settlement Agreement.

  • You do not need to file a claim for recovery.

    If you are a current participant in the Plan and are authorized to receive a payment, it will be deposited into your Plan account in the manner you designate for Plan contributions.

    If you are a member of the Settlement Class and no longer are a participant in the Plan, your Settlement proceeds will be mailed to you in the form of a check.

  • Under the proposed Plan of Allocation (which is subject to the Court’s approval), your share of the Net Settlement Fund will depend on the investment in SunTrust Stock in your Plan account during the Class Period. Settlement Class Members who signed a severance agreement upon their separation from SunTrust releasing ERISA claims will not recover under the Settlement. Participants who signed a severance agreement releasing claims against SunTrust arising out of their employment will also be excluded from receiving a distribution, but their claims will be released by the Settlement to the extent they were not already released by such severance agreements. The share of the Net Settlement Fund to be distributed to members of the Settlement Class who did not sign a release will be determined according to the following formula:

    A. Your Net Loss Is Calculated

    Your Net Loss, for the purpose of the allocation methodology, is calculated as follows:

    Net Loss = A + B - C - D, where, for each Settlement Class Member’s account:

    A = the dollar value, if any, of the balance invested in the Company Stock Fund at the close of business on the business day prior to the beginning of the Class Period;
    B = the dollar value, if any, of all acquisitions of units of the Company Stock Fund during the Class Period as of the time of purchase(s);
    C = the dollar value, if any, of all sales of units of the Company Stock Fund during the Class Period as of the time of the sale(s); and
    D = the dollar value, if any, of the balance invested in the Company Stock Fund at the close of business on the last day of the Class Period.

    B. Your Net Loss Percentage Is Calculated

    The Net Losses of all of the Settlement Class Members as calculated in Section A above will be totaled to yield the loss of the Plan as a whole over the Class Period (the “Plan’s Loss”). Your Net Loss Percentage will be determined by dividing your Net Loss by the Plan’s Loss.

    C. Your Share of the Net Settlement Amount Is Calculated

    Your Net Loss percentage will determine the dollar value of your share, if any, of the Net Settlement Fund. Your share will be your Net Loss Percentage multiplied by the Net Settlement Fund. If the dollar value of your share of the Net Settlement Fund is below $40.00 (the “De Minimis Amount”), you will not receive any payment. The share that would have been allocated to you will instead be added back into the Net Settlement Fund. Those who do receive a portion of the Net Settlement Fund will receive no less than the De Minimis Amount, or $40.00.

    The Court will be asked to approve the Plan of Allocation, a copy of which is available on the Important Documents portion of this website. To the extent that Defendants were participants in any of the Plan at any time during the Class Period, they will be excluded from the Plan of Allocation. No Defendant is entitled to a share of the Settlement.

    Your share of the Net Settlement Fund likely will be less than the decrease in the value of the SunTrust Stock held in your Plan account during the Class Period. You are not responsible for calculating the amount you may be entitled to receive under the Settlement. This calculation will be done as part of the implementation of the Settlement.

    Do not worry if you do not have records concerning your Plan account. If you are entitled to a share of the Net Settlement Fund, you will receive a statement from the Plan’s record-keeper or the Settlement Administrator showing the amount of your share. If you have questions regarding the Settlement or the Plan of Allocation, please contact Class Counsel, who are listed on page 2 of the notice.

  • The Court has preliminarily designated the attorneys from Kessler Topaz Meltzer & Check, LLP, Squitieri & Fearon, LLP, and Stull, Stull & Brody, as Class Counsel for the Settlement Class. If you want to be represented by your own lawyer, you may hire one at your own expense.

  • Class Counsel have pursued this action on a contingent basis and will file a motion for an award of attorneys’ fees and expenses. This motion will be considered at the Fairness Hearing. As previously described, Class Counsel will seek an award of attorneys’ fees not to exceed 33 1/3% of the Settlement Fund plus their expenses. Fees and expenses awarded by the Court will be deducted from the Settlement Amount.

  • In some class actions, class members have the opportunity to exclude themselves from the settlement. This is sometimes referred to as “opting out” of the settlement. Because of the way ERISA operates, you do not have the right to exclude yourself from the Settlement in this Action. The case was certified under Federal Rule of Civil Procedure 23(b)(1) as a “non-opt-out” class. Breach of fiduciary duty claims must be brought by participants on behalf of a plan, and any judgment or resolution necessarily applies to all participants and beneficiaries in those plans. As such, it is not possible for any participants or beneficiaries to exclude themselves from the benefits of the Settlement. Therefore, you will be bound by any judgments or orders that are entered in this Action, and, if the Settlement is approved, you will be deemed to have released Defendants and certain related parties from any and all claims that were or could have been asserted in the Action on your behalf or on behalf of the Plan, or all claims that were otherwise included in the release in the Settlement, other than your right to obtain the relief provided to you, if any, by the Settlement.

    Although you cannot opt out of the Settlement, you can object to the Settlement and ask the Court not to approve the Settlement. See the section entitled “How do I tell the Court that I Object to the Settlement?” below.

  • If you are a member of the Settlement Class, you can object to the Settlement if you do not like any part of it. You can give reasons why you think the Court should not approve the Settlement. The Court will consider your views. To object, you must send a letter or other written filing providing proof or otherwise affirming that you are a member of the Settlement Class and saying that you object to the Settlement. Be sure to include the following case caption and notation: “In Re SunTrust Banks, Inc. ERISA Litigation,1:08-cv-3384-RWS.” In addition, your objection must also include your name, address, telephone number, signature, and the reasons you object to the Settlement. Mail the objection to each of the addresses identified below so that it is received by no later than June 14, 2018. If your objection is not timely received, the Court will not consider your objections.

    The Court
    Richard B. Russell Federal Building
    2211 United States Courthouse
    75 Ted Turner Drive SW
    Atlanta, Georgia 30303-3309

    Class Counsel
    Mark K. Gyandoh, Esq.
    KESSLER TOPAZ MELTZER & CHECK, LLP
    280 King of Prussia Road
    Radnor, Pennnsylvania 19087
    Telephone: (610) 667-7706
    Fax: (610) 667-7056

    Defendant's Counsel
    David Tetrick, Jr., Esq.
    KING & SPALDING LLP
    1180 Peachtree Street
    Atlanta, Georgia 30309
    Telephone: (404) 572-3526
    Fax: (404) 572-5139

  • The Court will hold a hearing to decide whether to approve the Settlement.  You may attend and you may ask to speak, but it is not necessary.

  • If you are a member of the Settlement Class, you may ask the Court for permission to speak at the Fairness Hearing. To do so, you must send a letter or other paper called a “Notice of Intention to Appear at Fairness Hearing” in “In re SunTrust Banks, Inc. ERISA Litigation, 1:08-cv-3384-RWS” to the Clerk of Court, Class Counsel, and Defendants’ counsel at the addresses listed above. Be sure to include your name, address, telephone number, and your signature. Your Notice of Intention to Appear must be received no later than June 14, 2018.

  • Copies of the Notice were mailed to the last known address of all members of the Settlement Class who were participants in the Plan during the Class Period. If you would like to review the Notice, please click on the link for the Notice on the Important Documents page. To request that a Notice be mailed to you, call toll-free, 833-898-4008.

  • You can contact the Settlement Administrator at 1(833) 898-4008 or via the Contact Us page. Class Counsel may be contacted via e-mail at: mgyandoh@ktmc.com, stephen@sfclasslaw.com, or mklein@ssbny.com.

  • The Net Settlement Fund will be allocated to members of the Settlement Class pursuant to the Plan of Allocation as soon as possible after final approval has been obtained for the Settlement (which includes exhaustion of any appeals). Any appeal of the final approval may delay distribution by a year or more. Please be patient.

    There Will Be No Payments If The Settlement Is Terminated

    The Settlement Agreement may be terminated on several grounds, including: (1) if the Court does not approve the Settlement or materially modifies it without the Parties’ consent before such date; or (2) if the Court’s Order approving the Settlement is reversed or modified on appeal. The Settlement Agreement describes in detail the conditions under which the Settlement may be terminated. In the event any of these conditions occurs, there will be no settlement payment made, and the Action will resume.

For More Information

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Mail

In Re SunTrust Banks, Inc. ERISA Litigation
C/O JND Legal Administration
P.O. Box 91343
Seattle, WA 98111