PROPOSED SETTLEMENT REACHED IN SINGING RIVER HEALTH SYSTEM PENSION CRISIS
Mobile, Ala. – Attorneys with the law firms of Cunningham Bounds in Mobile, Alabama and Reeves & Mestayer, LLC in Biloxi, Mississippi announced that a settlement has been reached with Singing River Hospital System (“SRHS”) and others related to the pension crisis that has been embroiling the hospital for more than a year. Attorneys from both law firms filed a motion with the United States District Court for the Southern District of Mississippi seeking preliminary approval of the settlement, which is a necessary first step in finalizing any settlement in a class action.
In October 2014, SRHS announced that it had not made a contribution to the Singing River Health System Employees’ Retirement Plan and Trust (“Trust”) since 2009. The law firms of Cunningham Bounds, LLC and Reeves & Mestayer, LLC were the first to file a class action lawsuit seeking recovery of the missed contributions that they alleged SRHS should have been making to the Trust each year. The lawsuit seeks a recovery on behalf of all current and former employees of Singing River Health System who participated in the Singing River Health System Employees’ Retirement Plan and Trust, including their spouses, alternate payees, death beneficiaries, or any other person to whom a plan benefit may be owed.
Under the proposed settlement, SRHS has agreed to pay $149,950,000 to Trust over time. This amount is equivalent to the Plaintiffs’ calculation of the present value of the missed contributions that SRHS failed to make to the Trust between 2009 and 2014. If the Court approves the request for attorneys’ fees and expenses, they will be paid by SRHS in addition to the amounts required to fully refund the missed payments to the Trust.
“We fought very hard to ensure that plan beneficiaries will not have to pay any attorneys’ fees or expenses for the full recovery of the missed contributions to the Trust. It was very important to us first to seek a full refund of the missed contributions to the Trust and then to separately negotiate the issue of attorneys’ fees and expenses,” said Steve Nicholas, an attorney with Cunningham Bounds representing the proposed class of employees, retirees, and other plan beneficiaries.
As part of the settlement, Jackson County, Mississippi will pay $13,600,000 to SRHS between 2016 and 2024 to support indigent care and principally to prevent default on a bond issue by supporting the operations of SRHS. In addition, a Special Fiduciary, whose sole fiduciary responsibility is to the Trust, will report to the Jackson County Chancery Court on a quarterly basis regarding the financial condition of SRHS, the pension plan, and the status of the repayment schedule. Under the terms of the proposed settlement, the pension plan cannot be modified without the approval of the Special Fiduciary and the Jackson County Chancery Court after sixty (60) days’ notice to the Class Members and an opportunity for a hearing.
“The settlement is the product of a lengthy and intense negotiations process. By restoring all of the funds that SRHS for years failed to contribute to the Trust, we have achieved a result for the employees and retirees that no one would have predicted this time last year. We are proud of what we have accomplished and we look forward to presenting it to the court for approval,” said Lucy Tufts of Cunningham Bounds.
Steve Nicholas of Cunningham Bounds and Jim Reeves of Reeves & Mestayer, LLC have requested that the United States District Court for the Southern District of Mississippi appoint them as Settlement Class Counsel. Also representing the Plaintiffs in the federal class action lawsuit are Lucy E. Tufts of Cunningham Bounds, LLC and Matthew Mestayer of Reeves & Mestayer, LLC.