TevlinGleadle is very pleased to announce that on October 31, 2008, Murray Tevlin and Dan Gleadle appeared before Madam Justice Ballance of the BC Supreme Court and the Court approved the settlement in the terms proposed. The Court approved the overall $5.75 million dollar settlement amount, the legal fees of class counsel calculated at 20% of the amount recovered, a proposed fee to Mr. Gregg for his hundreds of hours work advancing the claim on behalf of the class, and the method of distribution of the net amount recovered to the class members.
Now that the settlement is approved, certain further work remains to be done to complete the settlement.
Firstly, we will work with defence counsel and the Court to have the formal court orderer entered as an order of the Supreme Court of British Columbia. This work is now underway.
The court ordered that the defendants pay the settlement amount to a Trust Company nominated by Class Counsel, by December 1, 2008. We are in the process of identifying a suitable Trust Company to receive and disburse settlement funds.
Once settlement funds are in the hands of the Trust Company, a portion of the funds will be used to pay legal fees and the fee to Mr. Gregg, and a portion of the remaining funds will be reserved to pay the costs of distribution, indluding actuarial costs to determine individual entitlement.
Plaintiff's counsel has engaged the services of an actuary, Mr. John Christie, who will do the work needed to determine the actual entitlement of individual class members based on actuarial principles. This work will involve liaising with Freightliner's Counsel and its actuaries to obtain information about the pension rights of individuals.
Until the actuary, Mr. Christie, has obtain necessary information and completed required calculations, we do not know the full details of which persons will share, nor the actual amount to be distributed to each person.
Monies to be distributed to class members will be treated as taxable income, and before any payments can occur, it will be necessary for class counsel and counsel for Freightliner to agree on the required "withholding". Monies withheld in this manner will be remitted by the Trust Company to Canada Revenue Agency("CRA") for each recipient, to the tax account for that recipient, at an appropriate rate. It may be necessary to obtain a pre-clearance from CRA for the appropriate withholding percentages. Monies withheld in this manner may or may not be recoverable by individual recipients when they file their individual tax returns. Each recipient of monies should obtain tax advice from their financial advisors as to the tax treatment of monies withheld from the districtuion. It is expected that when monies are distributed, T slips will also be delivered.
It is important that we have on hand up-to-date contact information for everyone who believes that he or she may be entitled to share in the distribution. Current information should be sent to TevlinGleadle by email at the email address ktorgerson@tevlingleadle.com.
Distribution of entitlement of the monies recovered in this pension class action will not be handled by Freightliner, but instead by the Trust Company nominated by TevlinGleadle, upon instructions from TevlinGleadle.
NOTICE OF SETTLEMENT AND PROPOSED DISTRIBUTION
On September 11, 2008, Dan Gleadle and Murray Tevlin appeared before Madam Justice Ballance of the BC Supreme Court to inform the Court of the settlement and to obtain directions for a process to obtain formal court approval.
The Class Proceedings Act requires court approval as to the overall $5.75 million dollar settlement with the defendants, the legal fees of class counsel calculated at 20% of the amount recovered, a proposed fee to Mr. Gregg for his hundreds of hours work advancing the claim on behalf of the class, and the method of distribution of the net amount recovered to the class members.
The Judge, having read the extensive material which we had provided the Court, heard submissions from counsel and indicated that before final approval was given, notice of the proposed plan for distribution should be provided to class members.
Class Counsel intend to give notice to class members via publication on the TevlinGleadle website, word-of-mouth initiated by representative plaintiffs, and by emails to class members outside British Columbia where email addresses are available.
The Court directed that a date be set for a subsequent court hearing for final approval. That date will be October 31, 2008. Any class member is entitled to attend at the court hearing to provide their views to the Court, or to engage their own legal counsel to represent them to advance their particular views in Court.
Proposed Distribution of Settlement Funds
At the hearing at 9:00 AM on October 31, 2008 we will seek approval of our recommended settlement terms.
1. Who Will Share? Class Counsel will propose that the net settlement amount be distributed only to persons who:
a. are members of the Western Star pension class proceeding, and
b. were, as at October 1, 2001, members of the Western Star Pension Plan or its predecessor pension plans (either pensioners, deferred vested pension plan members, or active employees with accrued pension benefits).
If you have a question about whether you are a member of the Western Star pension class proceeding, please see the definition of the Class in the Certification Order dated January 12, 2005.
For all purposes relating to distribution, individuals will be considered to have ceased to be members of the Western Star Pension Plan or its predecessor plans if, on or before September 30, 2001, they had elected to receive their interest in the pension plan by way of a commuted value payment or otherwise settled their pension entitlement and terminated membership in the Plan prior to that date.
Estates of such members who have passed away since October 1, 2001 will also be entitled to benefit.
2. Who Will Not Share? No distribution will be made to any person who is not a member of the Western Star pension class proceeding. In addition, we will propose that no distribution be made to any person who ceased to have an interest in the pension plan on or before September 30, 2001. In particular, those persons who had at some time been members of the Western Star Pension Plan, or it predecessor plans but who had, on or before September 30, 2001, elected to receive the commuted value of their pension plan benefit, or otherwise settled their pension entitlement and terminated membership in the Plan prior to that date, will not share.
The actual wind-up of the pension plan proceeded on a cut-off date of January 1, 2000. However, it is proposed that the cut-off date for purposes of sharing in the distribution of the amount recovered in this class proceeding will be October 1, 2001.
3. Why Choose the October 1, 2001 cut-off date? The claim in this case was in the nature of a claim to surplus existing in the plan at the time of termination, both actual surplus as well as any notional surplus which may have been created if the plaintiffs had succeeded in establishing liability on the part of the defendants for alleged misconduct in the administration of the Western Star Pension Plan.
Because a right to surplus only comes into existence at the time of termination, it is our view that the only persons with an interest in the claim are those persons who had an interest in the plan at the time of wind-up, the effective date of which was September 30, 2002. The cut-off date of October 1, 2001 will ensure that all individuals in this group will share in the settlement.
The October 1, 2001 cut-off date also has the effect of including those persons who elected to terminate their interest in the pension plan (including any surplus in the plan) after Freightliner’s decision to close the plant which was announced in October 2001. The logic of this extension is that once Freightliner made the decision to close the plant and announced it, all employee terminations and pension elections are properly considered part of the process of plant closure and wind up.
Employees who were terminated prior to learning of the decision to close the plant, (that is on or before September 30, 2001), and who chose to take their money out of the pension plan elected to terminate their interest in the plan, including any interest in a potential surplus, for reasons unrelated to the closure of the plan and wind up of the plan and cannot be considered to be persons who had a continuing interest in the plan at wind up.
This approach finds clear support in the leading Canadian text “Pension Law” by Ari Kaplan at page 581:
"Consent will also not be required from so-called “past members” of the plan, that is, employees who used to participate in the plan but on termination of employment and plan membership, elected a portability option and transferred the commuted value of their pension entitlement to a locked-in retirement savings vehicle. Such persons have no legal claim to any of the surplus assets in the plan; since they “were not at risk over the years as to the performance of the Plan and they should not now, and latterly, be able to come along and insist on receiving a portion of the benefit which the plan has generated”
(quote taken from C.F. Kingsway case).
4. What Distribution Formula will the Court be asked to approve? The court will be asked to approve a process for distribution. We will ask the court to approve, firstly, the cut-off date for inclusion or exclusion of class members, and then secondly, a formula for calculating what each individual will get which will be recommended by an actuary.
The formula will be based on the actual amounts received by plan members in the actual plan windup in respect of their defined benefit pensions.
For example, if, in the actual plan windup, plan member A received an amount of $10,000 either as a cash refund, transfer to an RRSP or the purchase of an annuity and the total windup amount for all members who are eligible to share in this distribution was $20 million, the plan member’s share of the total windup liability was 0.05% of the total. Plan member A will now receive 0.05% of the total net amount available for distribution as a result of this settlement. Therefore, if the amount available for distribution in the class proceeding is $4.5 million (after legal and actuarial costs) A would receive a.05% of $4.5 million or about $2,250 less any withholding taxes or other deductions required by law.
5. What Specific Amount Will Individuals Receive? This will not be known until after the Court approves the overall settlement amount, the legal fees, Mr. Gregg’s fee, the cut-off date (i.e. who will share?) and the actuary gathers needed information and calculates individual entitlement. Because of the need to gather precise information about each member who will share in the distribution, we expect that it will take some time after the Court approval before the amounts to be distributed to each individual are calculated.
6. Is it anticipated that any further Court Approval would be required prior to Distribution? No. It is anticipated that class counsel and the actuary, in co-operation with defence counsel, will take all steps necessary to complete distribution to individuals.
7. How will the actual distribution take place? It is expected that the agreed amount of the settlement will be held in trust pending completion of the settlement. After the actuary has gathered all the precise data about each member entitled to benefit from the settlement and completed his calculations, he will advise class counsel of the amount to be distributed to each member. Cheques will be issued to each member upon the direction of class counsel in accordance in with the Court approved formula. In the event that monies payable to any particular person or estate are not claimed within 6 months of the date of attempted first distribution, such monies will be distributed to those other persons who have received funds, proportionately, but no distribution of unclaimed money will be made if the recipient would receive less than $100. The balance of unclaimed and undistributed money will be paid to the United Way of the Central & South Okanagan/Similkameen.
8. What if you have questions, ideas or objections about the settlement or distribution? Firstly, each class member can contact Dan Gleadle or Murray Tevlin for further information or to discuss ideas or objections. Each class member is entitled to attend at the court hearing scheduled for October 31, 2008 to provide their views to the Court. Anyone can engage their own legal counsel to represent them to advance their particular views in Court.
9. What is the result of Settlement and Distribution once approved by the Court? Once approved, the settlement will be final and binding on all class members who did not opt out of the class pursuant to the terms of earlier orders of the Court. All claims by members of the class who have not opted out will be finally and absolutely extinguished and class members will be barred from bringing any further action against the defendants arising from or in connection with the WST Plan or any predecessor plans. This applies to all class members, whether or not they receive a share of the settlement.
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