The Supreme Court has asked the U.S. solicitor general to weigh in on a fiduciary claim against the investment committee for R.J. Reynolds.
The case came before the court after the tobacco company petitioned it in December to review a 4th Circuit Court of Appeals decision, which ruled in favor of participants in RJR's defined contribution plan. The plaintiffs alleged the company prematurely liquidated company stock, causing losses to the plan in a "reverse stock drop" case.
A district court had ruled that the company breached its fiduciary duty by not fully investigating the decision to sell Nabisco stock, which formerly owned R.J. Reynolds. The stock was at all-time lows when it was liquidated in January 2000. A year later, it had reached an all-time high.
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