A federal judge rejected an attempt by former Verizon employees today to block the transfer of $7.5 billion of retirement benefit liabilities to The Prudential Insurance Company of America.
Covington & Burling was lead counsel to Verizon in the matter, persuading Chief Judge Sidney A. Fitzwater of the Northern District of Texas to allow Verizon to proceed with the transfer of retirement benefits for 41,000 retirees as planned.
Members of the Association of BellTel Retirees filed a lawsuit on November 27 seeking a court order to stop the transfer. The plaintiffs, who alleged that the transfer violated the Employee Retirement Income Security Act of 1974 (“ERISA”), objected to the replacement of benefits provided by a Verizon pension plan with equivalent annuity benefits from Prudential.
In denying the motion for preliminary injunction, Judge Fitzwater concluded that “plaintiffs have failed to carry their burden of showing a substantial likelihood of success on the merits.”
The ruling makes it possible for Verizon to proceed with its plan to purchase a group annuity contract where Prudential, instead of the plan, would pay retirees’ pensions.
After the pension transfer, the retirees will continue to receive the same pensions, in the same form, from the insurance company. The transfer is expected to close this month.
Covington’s efforts in opposing the attempt to block the transfer were led by T.L. Cubbage andChris Pistilli, Amy Mooreand Robert Newman advised Verizon on the transfer. The litigation team also includes Jeffrey Huvelle and Matthew Swinehart.
