Cumulus Media to Pay $1 Million to Settle 401(k) ERISA Lawsuit

Cumulus Media Inc., the owner and operator of radio stations, has agreed to pay $1 million to settle a lawsuit filed by seven former employees who said the payment methods and investment choices in the company’s 401(k) plan violated ERISA.

The settlement, which requires court approval, was filed Tuesday in the U.S. District Court in Atlanta in Dean et al. compared to Cumulus Media Inc. and etc.

“The Defendants specifically deny any such liability and wrongdoing and state that they are entering into this settlement agreement to eliminate the burden and expense of further litigation,” the settlement document reads.

The plaintiffs believe that all claims are “deserving of attention” but they chose to settle due to the “inherent risks, difficulties and delays in such complex ERISA litigation,” the document says.

The plaintiffs sued in December 2022, alleging that the defendants “did not attempt to cut the plan’s costs or make the proper decisions to carefully examine each investment option that was proposed in the plan to ensure it was reasonable,” the complaint says.

A similar lawsuit filed in February 2020 by two different plaintiffs was dismissed by the U.S. District Court in October 2021. In November 2021, the plaintiffs filed an appeal with the 11th U.S. Circuit Court of Appeals in Atlanta. The appeal was voluntarily dismissed in December 2022 because “former plaintiffs’ claims, identical to those of named plaintiffs, are included in the lawsuit settlement,” the settlement document states.

According to the company’s latest filing on Form 5500, Cumulus Media’s 401(k) plan in Atlanta had $260 million in assets as of December 31, 2021.

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