The U.S. Labor Department has filed a lawsuit against 47 trustees of Agway Inc.'s employee retirement-savings plan, charging them with improperly investing $50 million of the bankrupt agricultural cooperative's assets.
The suit, filed in the U.S. District Court for the Northern District of New York, alleges that members of the investment committee, administration and the company's board valued company stock at prices above market value and gave out false investment information to plan participants.
The Labor Department seeks a court order to require the defendants to restore the $50 million in losses, plus interest, and to forfeit their benefits if all losses are not restored.
Agway filed for Chapter 11 bankruptcy in October 2002, beginning liquidation in 2004. The Labor Department says some of the liquidation money has been paid to 401(k) plan participants, but since the trial is unlikely to take place before 2008, participants may not get the rest of their money for a while.
The suit targets individual trustees, not the corporation.