Dynegy 401k Class Action Lawsuit Update

As most of you know several years ago Local 51 contacted an Oakland, California law firm that handles employee class action law suits. The class action suit was filed concerning Dynegy’s handling of the Union 401k Plan. Amazingly at the time of this writing the suit is still not completely finished but is nearing its end. The settlement was $17.9 million inclusive of the law firms 20%. The firm had to run public notices and put out bids for the settlement administrator. The final formula for determining how much each plan participant would receive is not yet completed.

The formula will use all Dynegy stock in a participants plan at given times. It will not matter how the stock got in your 401k account, it could have been from matching stock or from your decision to place your contributions into the Dynegy stock funds in the plan. The final individual settlement amounts will be placed in your 401k account. They may be allocated equally to the individual funds in the same manner each employee distributes theirs today. The exact method of allocation into your account funds has to be determined. The settlement funds placed in your account will be treated the same as the rest of your money in the funds by the IRS, so if you plan to take an early distribution you will be subject to normal early withdrawal penalties.

In the end all the plan participants who were hurt by the mismanagement of the 401k plan and were determined to be a member of the class will have more funds than before after this law suit. No one will recuperate the entire amount they lost. The settlement will likely be based on several dates in time after February 1, 2000 with more weight given to the amount of stock held by a plan participant on a date when the fraud was more evident.

I would like to thank the Local 51 members who stepped up when asked to be named in the class action suit. Three members from the Baldwin Plant participated in nearly all of the process over the last several years; they are Dennis Lively, Willis Harms, and Larry Grab. All should be thanked for their involvement and dedication. Eligible current and former Union members employed by both Illinois Power and Dynegy Midwest Generation will benefit from the class action settlement.

As we all hear about the money grabbing lawyers out there Dennis, Willis, and Larry all said that the law firm utilized by us was simply terrific. They were always very professional and always prepared in their representation. Our firm in St. Louis also helped in the suit. These attorneys are the ones we don’t think about much when we hear about alleged law suit “abuse”.

As usual work safe and follow your safety rules and policies so you can enjoy your time off.

John H. Johnson
Assistant Business Manager