Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: FRIDAY, June 4, 1993 TAG: 9306040271
SECTION: CURRENT PAGE: NRV-1 EDITION: NEW RIVER VALLEY
SOURCE: MICHAEL STOWE STAFF WRITER
DATELINE: RADFORD LENGTH: Medium
He figured it was about time.
For the last two years, Duncan - and about 400 former workers at the Burlington Industries plant in Radford - have been waiting for a class-action suit against their former employer to be settled.
Burlington sold its Radford plant to New River Industries in 1987 as part of a $2.4 billion leveraged buyout.
The Radford plant workers were among more than 5,000 Burlington employees included in the suit that claimed that Burlington illegally froze $70 million in retirement benefits during the buyout. The company also sold plants in Jamestown, Kernersville and Greensboro, N.C.
The suit was filed in 1989, but Duncan didn't know about it until he called Burlington in 1991 to inquire about his retirement account.
The U.S. District Court in Raleigh, N.C., ruled in favor of the workers in 1991 and the federal Court of Appeals in Richmond upheld the decision last year.
Kiran Mehta, the Charlotte, N.C., lawyer who represented the workers, said a settlement was approved by the district court in April and checks were mailed out to employees no later than May 28.
Before 1987, Burlington's retirement policy allowed workers whose divisions were sold to collect their retirement savings in a lump sum, Mehta said.
During the leveraged buyout, however, Burlington passed an amendment - approved by the Internal Revenue Service - that allowed workers to remove that discretion.
That meant that Duncan couldn't collect the $13,500 he had accrued in retirement benefits until he retired or quit at New River Industries.
"The change was made to make sure that the system was fair to all employees whether they remained with the company or whether they left," said Bryant Haskins, a spokesman for Burlington.
The suit asked the court to force Burlington to administer the retirement fund under the original plan.
Mehta said the settlement included the $70 million in retirement benefits plus interest on the money.
"It was a very fair settlement," he said.
Haskins stressed that there never was any argument over whether or not the former Burlington employees would get their retirement funds.
"It was just an agreement to pay now instead of later," he said.
Haskins said the settlement money was taken from a separate retirement fund and wouldn't change Burlington's profit margins.
Duncan's wife, Doris, said she's just happy the waiting is over.
Every three months for the past two years she has called Mehta's office to find out the status of the lawsuit. "We are very satisfied," she said. "It just took so long."
Duncan, 45, joined Burlington's retirement system in 1975 when he started work at the company's South Carolina mill.
by CNB