$40 Million Class Action Settlement with Merrill Lynch Receives Preliminary Approval
The law firms of McCallum, Hoaglund, Cook & Irby, LLP and Hanly, Conroy, Bierstein, Sheridan, Fisher & Hayes, LLP are pleased to announce that preliminary approval has been given to the proposed class action settlement in the pending litigation over deferred compensation brought by former financial advisors of Merrill Lynch.
The class action litigation was initiated in October 2009 by former financial advisors Scott Chambers and John Burnette, who worked in Merrill’s Birmingham, Alabama office. The class action lawsuit, pending in federal court for the Southern District of New York (Scott A. Chambers, et al. v. Merrill Lynch & Co., Inc., et al., Case No.: 10-cv-07109), seeks to recover deferred compensation under plan language that provided for a cash payout in the event of a “change of control” at Merrill Lynch and the advisor’s “good reason” resignation.
According to one of the Plaintiffs’ attorneys, Charles A. “Chip” McCallum, III, “the settlement preliminarily approved by Judge Nathan brings affected financial advisors one step closer to finality in this long running and hard-fought dispute.”
The class settlement includes financial advisors with production of $500,000 and less, whose deferred compensation account values tend to be less than $100,000. Those financial advisors with production above $500,000 and who signed waivers as part of their transition package are not included in the settlement. The settlement provides a cash payout of over $40 million to approximately 1,500 financial advisors. Eligible financial advisors will receive, in approximately forty-five (45) days, notification of how much his or her payment will be under the settlement, if it receives final approval.
According to McCallum, “the settlement will allow class members to receive an immediate and significant cash payment now, rather than going through lengthy, drawn-out, and costly individual arbitration proceedings, where results can be uncertain.”
Judge Nathan has set February 13, 2013 as the final fairness hearing date, when final approval of the class settlement will be considered.