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Ford Employee Trial-Next Chapter

Since one trouble never comes alone, Ford will have one more problem to deal with next year. Despite the Detroit car maker's objections, it seems that US District Judge Stephen Murphy has decided to allow the 2006 lawsuit to go forward, the Detroit News reported.

"A stock can be imprudently risky for an employee savings plan even in the absence of fraud or imminent collapse," Murphy said.

The trial was initiated by Ford employees who had company stock as a retirement investment. It was filed under ERISA, a broad federal law that sets rules for pension and 401(k) plans and allows participants suing over mismanagement.

Current and former non-union workers claim this was a true mistake because the stock fell about 70 percent between April 2000 and April 2006 and now trades under $2.20.

As the lawsuit claims, Ford's stock was only an investment alternative and a company match during some changing times including the spinoff of parts-maker Visteon, rising pension and health care costs, and a drop in market share. However, in a court filing, Ford stated that employees had opportunities to diversify their investments in major mutual funds.

Well, that wasn't extremely convincing for the unsatisfied employees as they think "they had an obligation to protect the plan and its participants from unreasonable and entirely predictable losses". In fact, their opinion is that the famous Detroit automaker “failed to apprise participants of the myriad of systemic, internal and marketplace problems ... which threatened the viability of the company," as quoted in the lawsuit.

So, what's Murphy's intention after all? Well, he just wants Ford and lawyers for employees to begin holding settlement talks supervised by the U.S. Magistrate Judge Steven Pepe.

The future surely looks promising but an attorney for the employees, Stephen Wasinger, refused to comment. Should it be because silence is golden when waiting for your big slice out of a pricey trial?!

 
 
 
 
 

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