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Sarbanes-Oxley News & Developments
Former Kmart Execs Want Lawsuit DismissedA federal judge considered a motion by former Kmart board members to dismiss a lawsuit brought by a former employee.
> > In Detroit, monday, U.S.District Judge Avern Cohn considered motion by former Kmart Corp. board members to dismiss a lawsuit brought by a former employee, alleging they misled employees about the financial condition of the company.
Judge Cohen did not indicate when he would rule on the motion.
Quincie Rankin, a former employee of Kmart, sued the former directors and executives, including Charles Conway, its former CEO, and James Adamson, its former chairman and chief executive, in connection with the company 401(k) plan.
Rankin, a plan participant, alleges former board members and executives failed to properly oversee the administration of the 401(k) plan, which heavily invested in Kmart stock.
Lawyer Glen Connor, representing Rankin, said the board of Kmart had a duty under ferderal pension law to warn employees who held stock that the company was headed for financial collapse.
If Judge Cohen does not dismiss the case, Connor would be able to depose executives and former directors of Kmart to find out what they might have known about the financial collapse of the company.
Rankin is seeking class action on behalf of all Kmart employees who participated in the 401(k). Cohn has not yet ruled on her request.
Source: Detroit Free Press article
Published:2003-07-02
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