Frequently Asked Questions Related To This Settlement
- Am I being sued?
- Why did I get a notice package in the mail?
- What is the Action about?
- How do I know if I am part of the Settlement?
- Why is this Action a class action?
- What does the Settlement provide for me and other members of the Class?
- How may I obtain a payment?
- How much will my payment be?
- How will I receive my payment?
- Do I have a lawyer in this case?
- How will Plaintiffs' Counsel be paid?
- Can I exclude myself from the Settlement Class?
- What does it mean to object to the Settlement?
- How can I tell the Court that I object to the Settlement?
- May I speak at the Fairness Hearing regarding the Settlement?
- How do I receive a copy of the Settlement Notice?
- What if I have additional questions?
No, you are not being sued.
Why did I get a notice package in the mail?
You or someone in your family are or may have been a participant in the El Paso Corporation Plan (the "Plan"), at any time between November 9, 2000 and March 11, 2004 (the "Class Period) and had Plan accounts which included investments in El Paso Corporation common stock. If you fall within this group, you have a right to know about the Settlement and all the options available to you regarding the proposed Settlement currently pending before the United States District Court for the Southern District of Texas, Houston Division (the "Court").
In the Action, Plaintiffs claimed that Defendants breached their fiduciary duties under the Employee Retirement Income Security Act of 1974 ("ERISA") by continuing to allow the investment of the Plan's assets in El Paso stock during the Class Period at a time when, according to Plaintiffs, El Paso stock was an imprudent investment for the Plan. Plaintiffs also allege that Defendants violated ERISA by, among other things, : (1) permitting the Plan to purchase and hold shares of El Paso common stock during the Class Period when they knew or should have known it was imprudent to do so. Specifically, Plaintiffs alleged that (1) Defendants allowed the Plan to imprudently invest in El Paso stock when they knew or should have known that the Company's value, financial and operational health, and future prospects were improperly inflated and unsustainable; (2) Defendants allowed the Plan to maintain and augment its investment in El Paso stock, despite their actual or constructive knowledge that its improper manipulation of the California and national energy markets, use of round-trip trading schemes and improper overstatement of gas and oil reserve estimates undermined the propriety of investing Plan retirement assets in El Paso equity; (3) Defendants disseminated inaccurate and misleading material information to Plan participants regarding investment of Plan assets in El Paso stock and, additionally, withheld material information vital to making any such Plan investment decision; and (4) that Defendants, because of their positions as corporate insiders with a stake (monetary through El Paso equity ownership and personal through their position at the Company) had an interest in withholding information concerning El Paso's business and operational problems to portray El Paso as a growing and profitable company.
The Defendants are: El Paso Corporation and each of its predecessors and successors in interest and each Person that controls, is controlled by, or is under common control with El Paso and any of their direct or indirect parents and subsidiaries and any company whose employees participated in an ERISA plan set up or sponsored by the Company, William A Wise, Douglas L. Foshee, Ronald L. Kuehn, Jr., Jeffrey I. Beason, H. Brent Austin, D. Dwight Scott and Joel Richards, III (collectively, "Defendants"). If the litigation were to continue, the Defendants would raise numerous defenses to liability, including but not limited to the following: (1) Defendants complied with ERISA at all times and did not misrepresent any material fact; (2) the Plan's investment in Company stock was prudent at all times; (3) Defendants have no liability for Plaintiffs' claims with respect to Plaintiffs' own Planc contributions under ERISA § 404(c); (4) Plaintiffs cannot show any damages even if they could prove Defendants breached their fiduciary duties; and (5) Defendants believe that a litigation "class" could not be certified.
How do I know if I am part of the Settlement?
Any person, excluding Defendants, who was a participant in the Plan, at any time between November 9, 2000 and March 11, 2004 and whose Plan accounts included investments in El Paso stock, or a beneficiary of any such person, is a member of the Settlement Class. Since this lawsuit does not allow you to opt out of the settlement, if you are a member of the Settlement Class, you do not have the right to exclude yourself from the Settlement in this case. Therefore, you will be bound by any judgments or orders that are entered in this Action for all claims that were asserted in this case on your behalf, on behalf of the Plan or otherwise included in the release provided for by the Settlement. Although you cannot opt out of the Settlement, you can object to the Settlement and ask the Court not to approve the Settlement. (See questions 12-14 for more information.)
Why is this Action a class action?
In a class action, one or more persons called class representatives sue on behalf of people who have similar claims. All of these people who have similar claims make up the class and are referred to individually as class members. One court/action resolves the issues for all class members. Because the Plaintiffs believe that the wrongful conduct they allege affected a large group of people in a similar way, Plaintiffs filed this case as a class action.
What does the Settlement provide for me and other members of the Class?
The Defendants agreed to create a settlement fund of $17 million dollars, plus interest earned thereon, to be divided among eligible Class Members, after payment of any court-approved attorneys' fees, compensation payments to the Named Plaintiffs, and payment of other costs and expenses of the settlement. The Settlement Agreement, available on this website, describes the details of the proposed settlement. This Settlement releases certain claims against the Defendants with respect to the investment of the Plan's assets in El Paso stock during the Class Period. El Paso will also implement or maintain the following provisions to the Plan through at least December 31, 2009: (1) No participant will be required to invest in El Paso stock; (2) El Paso's matching contributions will not be required to be made in El Paso stock; (3) El Paso will continue its participant education program and automatic enrollment for new participants; (4) El Paso will provide all participants with annual training on investment alternatives and will provide web-based tools; (5) El Paso will bear the expense of providing investment management advice and tools to participants; and (6) El Paso will retain a professional investment advisor to review the investment options in the plan.
If the Court approves the Settlement, at some point thereafter, a distribution of your Settlement proceeds will be made to your plan account if you are a Class Member and a current Plan participant. If you are a Class Member and no longer participate in the Plan, a new account will be created specifically for your settlement proceeds by the Plan's administrator and you will be notified by mail.
If you are a former participant and you have not provided the Plaintiffs' Counsel or El Paso with your current address, please email your current address along with your previous address to: ElPasoERISAsettlement@btkmc.com or call, toll-free, 1-866-396-7024.
Your share of the Settlement Fund will depend on the number of shares of El Paso stock you held in your Plan account during the Class Period, and the amount that you lost as a result of this holding. The formula will take into account your purchases or sales of El Paso stock in your Plan account. The more you lost because of El Paso stock in your Plan account, the larger your share of the Net Settlement Fund will be. Your share of the Net Settlement Fund, however, will be less than your actual losses, unless your actual losses are less than $10.00 (ten dollars). You are not responsible for calculating the amount you may be entitled to receive under the Settlement - this calculation will be done as part of the implementation of the settlement. Your settlement amount (subject to the minimum allocation provision) will be calculated in accordance with a Court-approved Plan of Allocation, the proposed version of which is available in this website. However, no Class Member will receive less than $10.00 (ten dollars).
How will I receive my payment?
You do not need to file a claim. If you are a Settlement Class Member and a current Participant in the Plan as defined by the Plan of Allocation, then your share of the Net Settlement Fund will be deposited in your Plan account pursuant to the Plan of Allocation. If you are a Settlement Class member and a former Participant in the Plan as defined in the Plan of Allocation a new account will be created by the Plan administrator and notification of such an account will be mailed to you. If you are a former Participant and you have not provided the Plaintiffs' Counsel or El Paso with your current address, please email your current address along with your previous address to: ElPasoERISAsettlement@btkmc.com or contact Plaintiffs' Counsel at 1-866-396-7024.
Do I have a lawyer in this case?
The Court has appointed the law firms Barroway Topaz Kessler Meltzer & Check, LLP and Hoeffner & Bilek, L.L.P. as Plaintiffs' Counsel for Named Plaintiffs in the Action. You will not be charged directly by these lawyers. If you want to be represented by your own lawyer, you may hire one at your own expense.
How will Plaintiffs' Counsel be paid?
At the Fairness Hearing, Settlement Plaintiffs' Counsel will apply for an award of attorneys' fees not to exceed 25% of the Net Settlement Fund and reimbursement of all expenses incurred during the litigation. To date, Plaintiffs' Counsel have not received any payment for their services in prosecuting this Action on behalf of the Settlement Class, nor have counsel been reimbursed for their out-of-pocket expenses.
Can I exclude myself from the Settlement Class?
You do not have the right to exclude yourself from the Settlement. The Action was conditionally certified under Federal Rule of Civil Procedure 23(a) and (b)(1) as a non "opt-out" class action because the Court preliminarily determined the requirements of the rule were satisfied. Thus, it is not possible for any participants or beneficiaries to exclude themselves from the benefits of the Settlement. As a Settlement Class Member, you will be bound by any judgments or orders that are entered in the Action for all claims that were or could have been asserted in the Action or are otherwise included in the release under the Settlement.
What does it mean to object to the Settlement?
Although you cannot opt out of the Settlement, you can object to the Settlement and ask the Court not to approve it. Objecting is simply telling the Court that you do not like something about the Settlement or the request for attorneys' fees and reimbursement of expenses. Filing an objection will not have any bearing on your right to Settlement benefits if the Court approves the Settlement.
How can I tell the Court that I object to the Settlement?
If you are a Settlement Class member, you can object to the Settlement if you do not like any part of it. You can give reasons why you think the Court should not approve it. To object, you must send a letter or other written filing saying that you object to the Settlement in William H. Lewis and Keith Brodie v. El Paso Corporation, et al., Civil Action No. H-02-4860. Be sure to include your name, address, telephone number, signature, and a full explanation of all reasons you object to the Settlement. Your written objection must be mailed to the Clerk of the Court at the address listed on the Preliminary Approval Order and to all attorneys listed on pages 17-18 of the Settlement Agreement and must be postmarked by no later than April 6, 2009.
May I speak at the Fairness Hearing regarding the Settlement?
The Court will hold a Fairness Hearing on April 27, 2009 at 3:30 p.m. at United States District Court for the Southern District of Texas at Houston, in the Courtroom then occupied by United States District Judge Lynn N. Hughes, to decide whether to approve the Settlement. You may attend and you may ask to speak, but you are not required to do so.
If you would like to ask the Court for permission to speak at the Fairness Hearing you must send a letter or other paper called a "Notice of Intention to Appear at Fairness Hearing" in William H. Lewis and Keith Brodie v. El Paso Corporation, et al., Civil Action No. H-02-4860. Be sure to include your name, address, telephone number, and your signature. Your Notice of Intention to Appear must be served on the attorneys and Clerk of Court listed on page 2 of the Notice and postmarked no later than April 6, 2009.
How do I receive a copy of the Settlement Notice?
Copies of the Notice were mailed out to the last known address of all members of the Plan who held interests in El Paso stock during the Class Period. If you would like to review the Notice, please click on the link for the Notice. To request a copy of the Notice be mailed to you, call 1-866-396-7024; however, please be advised that requesting a Notice does not guarantee that you are a Class Member.
What if I have additional questions?
If you have additional questions regarding this case, please send an email to: ElPasoERISAsettlement@btkmc.com. This email will go to the law office of Barroway Topaz Kessler Meltzer & Check, LLP, and will be directed to the individuals handling the Settlement. Plaintiffs' Counsel have also set up a toll free number, 1-866-396-7024, if you prefer to call with your questions.