The lawsuit between the R.J. Reynolds Tobacco Co. and its 3,500 employees, has gained the class action at a a federal District Court today. The lawsuit was filed in May 2002 by Richard Tatum of Winston-Salem in federal court in Greensboro.The lawsuit alleges that Reynolds failed to live up to its duty as trustee of its 401(k) retirement plan by selling Nabisco stocks at a loss in January 2000.
Robert Elliot of Elliot Pishko Morgan in Winston-Salem, is an attorney for Tatum. He opined,
“This is a big ruling and very momentous for this case, considering that Reynolds has tried to block the class-action certification for more than six years.”
On the other hand, David Howard, a spokesman for Reynolds, said yesterday that the company has filed an appeal of the judge’s certification decision with the Fourth Circuit Court of Appeals. It also has filed a summary judgment for dismissal of the lawsuit with the federal court.
After the spinoff, RJR Nabisco was renamed Nabisco Group Holdings and traded under the ticker symbol “NGH.” Its main asset was its 80.5 percent ownership stake in Nabisco.After the spinoff, the RJR Nabisco fund became a Nabisco Group Holdings fund. RJR Tobacco employees could not invest in these Nabisco funds, and eventually Nabisco stock funds that RJR Tobacco employees had invested in were divested by RJR Tobacco.
Tatum’s lawsuit claims that he asked that retirement-plan participants be able to keep their investments in Nabisco.The lawsuit said that Nabisco stocks endured a rough time after the spinoff and by Jan. 31, 2000, they were trading at very depressed levels.The lawsuit points out that the Nabisco stocks eventually rebounded from their lower levels.
Source: Winston -Salem Journal
Filed under Class Action, Lemon Law, Product Liability Lawsuit, Shareholder Lawsuit | Tags: Fourth Circuit Court of Appeals, Nabisco Group Holdings, Nabisco stocks, R.J. Reynolds Tobacco Co | Comment Below