A former employee of the Bureau of National Affairs may represent a class of plaintiffs who allege they lost out when they sold company stock back to BNA at a lower share price than Bloomberg Inc. paid when it bought BNA for $990 million in September 2011.
Plaintiff Judith Knight alleges the BNA board set the stock price at $17.50 in March 2011. In June, shortly before Knight turned 65, she received notice from BNA that she would have to withdraw her account balance of approximately 30,000 shares from the company’s 401(k) plan. She had the option to sell the shares back to BNA or to keep the shares but transfer them to the company’s non-ERISA Stock Purchase and Transfer Plan. She chose to sell the shares back at the $17.50 price.
Bad choice, apparently. Knight alleges that several weeks after she elected to sell back her shares, Bloomberg bought BNA at a price of $39.50 per share. Knight alleges BNA was in talks to complete the sale before the board set the $17.50 share price, so it had reason to believe the share price should have been higher.
Knight sued under ERISA § 502(a)(2). On Feb. 4, Alexandria U.S. District Judge Liam O’Grady certified a class of plaintiffs in Knight’s suit alleging the defendants breached their fiduciary duty to the plan and the plaintiffs as negotiations with Bloomberg and other potential buyers progressed. The case is Knight v. Lavine.