- 5 -
and deducted during 1993.3 The remaining amounts were paid by
the other claimants.
As relevant, the plan provided the following regarding
payment of plan expenses:
All reasonable costs, charges and expenses incurred by
the Trustee in connection with the administration of
the Fund and all reasonable costs, charges and expenses
incurred by the Plan Administrator in connection with
the administration of the Plan (including fees for
legal services rendered to the Trustee or Plan
Administrator) may be paid by the Employer, but if not
paid by the Employer when due, shall be paid from the
fund.
The plan provided that the trustees did not guarantee the trust
fund against investment loss, and that the trustees would be
indemnified by petitioner, as employer, for any liability to
which they might be subjected while acting as trustees.
On August 31, 1993, Prudential and the claimants entered
into a settlement agreement calling for a cash payment by
Prudential of $2,302,324.58. This amount was allocated among the
claimants in accordance with a collection factor applicable to
each claimant.4 The plan's collection factor was approximately
15 percent, and it received $347,588 of the settlement proceeds.
The collection factors of Sklar, Greenstein, and Scheer totaled
3The total litigation costs incurred during 1993 were
$239,714.
4The claimants' attorneys allocated the settlement proceeds
in accordance with an assigned collection factor which
purportedly reflected the strength of each claimant's case.
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Last modified: May 25, 2011