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Two members of the duPont family must take a challenge over the management of their employees’ pension funds to a federal court in Delaware, a federal judge in Maryland ruled ( Wright v. Elton Corp. , D. Md., No. 1:16-cv-00329, 3/17/17 ).
The most convenient venue to litigate the family’s allegations that Elton Corp. and other trustees failed to bring the pension trust into compliance with the Employee Retirement Income Security Act is the U.S. District Court for the District of Delaware, Judge Richard D. Bennett held March 17. Delaware is where the plan is administered, where the alleged breach took place and where the trustees may be found, the judge said in granting the trustees’ request to change venue.
This unusual case involves one main question: whether the M.C. duPont Clark Employee Pension Trust, which was created in 1947 by Mary Chichester duPont Clark to provide retirement benefits to employees of members of the family, became subject to ERISA upon the law’s passage in 1974.
The lawsuit was brought by M.C. duPont Clark’s grandchildren Helena duPont Wright and James Mills and their two employees, Joseph Wright and T. Kimberly Williams.
They claimed that the trust has never been operated in compliance with ERISA, despite their efforts to persuade the trustees to do so. This failure, they alleged, created increased funding obligations for them and created exposure to penalties and fines if the Labor Department learned of trust’s existence and its failure to follow ERISA over 43 years.
M.C. duPont Clark funded the trust with 50 shares of common stock of Christiana Securities Co. that eventually came to include more than $6 million of DuPont corporate stock, according to court documents.
Funk & Bolton PA and the Wagner Law Group PC represent the family and employees. Franklin & Prokopik and Young Conaway Stargatt & Taylor LLP represent the trustees.
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