Peabody v. Davis

Record contained sufficient evidence to support Dist. Ct. judgment in favor of plaintiff-plan participant in ERISA action alleging that plaintiff incurred losses when defendants-retirement plan trustees breached their fiduciary duty in managing ERISA plan, where assets of plan were comprised of stock in plaintiff’s employer’s closely held corporation, and where said stock severely deprecated in value throughout time of plaintiff’s participation in said plan. While express duty to diversify did not apply to instant Eligible Individual Account Plan, defendants nevertheless breached their duty of prudence to plaintiff since: (1) prudent investor would not have remained 98% invested in said company stock; and (2) defendants were in position to know that core business model of said company was seriously undermined throughout relevant time period. Ct. further found that section 404(c), which renders fiduciaries non-liable for plan losses attributable to participant’s own investment decisions, did not apply. Ct., though, remanded matter for new damages calculation in order to account for gradual withdrawal of company stock, rather than total sale of said stock at any specific point in time.