Bed Bath & Beyond employees are suing the committee that monitored the company’s 401(k) retirement plan.
The grounds of the lawsuit include “imprudence,” which led them to lose out on millions of dollars in losses.
This happened right after the company that is known for its posh home furnishings filed for bankruptcy.
It is a form of class action lawsuit that was filed in Newark, New Jersey.
The plaintiffs seek damages through the lawsuit that they in a federal court. It all started when Bed Bath & Beyond stopped their 401(k) plan on the 1st of August, 2023. This came around three months after they filed for financial relief under Chapter 11 of the Bankruptcy Code.
Former employees of the furnishing company have said they have faced losses of more than $5 million. Their MassMutual plan apparently had a “guaranteed investment account.”
The former employees were under the notion that there was little risk. However, they ended up suffering a loss of a whopping 10%. The rising interest rates also damaged the value of the investments that were underlying.
The lawsuit claims that the 401(k) committee has not been able to keep up with its fiduciary duties. They have failed to replace the account in question with a similar investment option to help out the former employees.
The company committee could opt for a money market fund or a stable value fund that had less risk for the employees in case the company faced bankruptcy.