Mississippi-based hospital system Singing River Health Services has agreed to pay $156 million to settle federal class actions and two state suits accusing it of failing to make annual required contributions into a retirement fund. Singing River Health Services Foundation agreed to make about $149.5 million in contributions over 35 years into a retirement trust and pay the Plaintiffs’ lawyers more than $6.5 million to settle claims in three consolidated federal class actions and two state suits accusing the organization of underfunding its retirement plan and not disclosing the true state of affairs.
Lucy Tufts, a lawyer with the Mobile firm Cunningham Bounds, one of the law firms representing the plan beneficiaries, said in a statement that the settlement agreement is the product of a “lengthy and intense” negotiation process and that the beneficiaries and their counsel are proud of the agreement. She added:
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.
In the first suit filed against the large hospital system in December 2014, the Plaintiffs accused it of underfunding its defined-benefit retirement plan by nearly $150 million between 2009 and 2014. The complaint included a handful of claims, including contract claims and claims under the Employee Retirement Income Security Act (ERISA), among others. Two additional federal suits followed in January, and by June the federal suits were consolidated. The parties engaged in three separate mediations before agreeing on a settlement. The government of Jackson County, where Singing River is located, was not a party in the litigation, but according to Ms. Tufts, it was involved in the settlement negotiations early on because it had an interest in the conclusion of litigation. The county will pay about $14 million to support indigent care and prevent default on a bond issue.
As a result of the agreement, the state court will also monitor Singing River’s activities with respect to the retirement fund, and any trustees named as Defendants in the suit will have claims against them settled. The settlement is subject to approval by Special Fiduciary and the federal and state courts for the two state cases included in the agreement. Singing River still faces six state suits that are currently pending. The not-for-profit corporation administers two hospitals and operates smaller facilities and has more than 2,400 employees and 600 retirees, making it one of the largest employers in Jackson County, according to court filings.
The plan beneficiaries are represented by Lucy E. Tufts of Cunningham Bounds LLC and Jim Reeves and Matthew G. Mestayer of Reeves & Mestayer PLLC and Steven L. Nicholas. The federal cases are Jones et al v. Singing River Health Services Foundation et al; Cobb et al v. Singing River; and Lowe et al v. Singing River, all in the U.S. District Court for the District of Southern Mississippi. The state cases are Broun et al v. Singing River, and Lay v. Singing River, in the Chancery Court of Jackson County, Miss.
Source: Law360.com
