Beasley Allen lawyers are representing U.S. retirees of E. I. du Pont de Nemours and Company in a class action lawsuit after a series of corporate maneuvers taken by the company over the last four years left workers’ retirement benefits in jeopardy of failing. Beasley Allen lawyers representing the retirees include W. Daniel “Dee” Miles, III, head of Beasley Allen’s Consumer Fraud Section, along with James Eubank.
“Workers for DuPont have given decades of their working lives to the company to secure a pension for retirement that they were promised. These companies are now attempting to find ways to not only avoid funding the plan, but also are placing it in jeopardy of failing, leaving the workers with little or no pension after a lifetime of savings,” Miles said.
In 2015, the 217-year-old DuPont merged with Dow Chemical to create DowDuPont. In 2019, the new corporate entity split into three new companies Corteva, DuPont and Dow. Corteva is a combination of DuPont and Dow agriculture businesses. Through this scheme, DuPont and Dow shifted all liability for the DuPont U.S. pension, which has covered DuPont employees in America since 1904, to the newly created Corteva. The liability of the DuPont U.S. Pension plan is approximately $19 billion.
Plaintiffs argue that Corteva, which solely focuses on agriscience business, understates its liabilities including income fluctuations due to weather, global trade, and other factors beyond the company’s control. Additionally, the agriscience business involves the manufacture of chemicals already subject to large-scale litigation, the liability for which was also transferred to Corteva. Other corporate spin transactions of DuPont have also come under scrutiny. Plaintiffs also contend that under Corteva the pension plan is underfunded and uses overly optimistic estimates. Now that Corteva, Dow, and DuPont are three separate companies, Corteva can file for bankruptcy and discharge its responsibility to fund the promised pensions, leaving retirees to receive pennies on the dollar. Neither DuPont nor Dow will be affected by such a bankruptcy.
“DuPont by law must fund these plans but had an increasing unfunded liability in their pension. Using traditional ERISA numbers, it went from $4.45 billion underfunded in 2015 to $5.98 billion underfunded in 2018. DuPont could not simply get rid of the pension without fully funding it by paying that massive unfunded liability. So, Dow, Dupont, and their boards, through the merger, appear to have worked together from the beginning to concoct a plan to get rid of the massive liability from the underfunded pension by taking away the historical business operations of the plan sponsor, E. I. du Pont de Nemours and Company, and transferring the now empty shell company to Corteva as a subsidiary, still holding the bag for all pension liability. While all of this happened, DuPont assured pensioners that their retirement was well funded and safe,” Miles explained.
“Because of the Defendants’ actions, the plan, which was already in a downward funding spiral, is now left with an empty shell company as a plan sponsor, linked to a newly formed company that is also saddled with all of the environmental and agricultural liabilities of the historical Dow/DuPont companies. This completely separated the new, stable Dow and DuPont companies from any repercussions should the pension fail. The Defendants have attempted to avoid a legally required $6 billion funding obligation to the plan and thereby breached their fiduciary duties to the Plan as well as violated ERISA’s employee protective purpose. This lawsuit will correct this misconduct by the plan sponsors.”
The proposed class includes more than 100,000 people, including retirees and beneficiaries in the pension plan. Beasley Allen is working with Kantor & Kantor, Sinclair Law Firm and Edward Stone Law PC to represent the retirees.
The class action lawsuit, Thondukolam v. Corteva, Inc., was filed in the United States District Court for the Northern District of California, case number 3:19-cv-03857-SK.
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