Previous Story
Senate holds off action on derivative lawsuit bill
|
Posted on Jun 13 2011
Retirement Fund officials said they filed a counterclaim against Merrill Lynch yesterday, a development which they used to justify anew their request to senators not to pass a compromise version of Senate Bill 17-43 which allows beneficiaries of trusts and retirement fund programs to take legal action on behalf of trusts or the NMI Retirement Fund when trustees who manage them refuse to bring such actions.
But Retirement Fund board of trustees chair Sixto Igisomar, administrator Richard Villagomez, board counsel Viola Alepuyo, and legal counsel Carolyn M. Kern were not able to provide senators with a copy of the counterclaim. Kern said the counterclaim was filed by attorney Brad Huesman.
The filing of a counterclaim means that the Retirement Fund is also suing Merrill Lynch. The Retirement Fund was initially named defendant in the case filed against Merrill Lynch by three retirees who have since urged the Fund trustees to join them in a lawsuit.
The retirees’ lawsuit filed in October 2009 says that Merrill Lynch, along with the Fund trustees, provided “bad advice” to the trustees, resulting in the collapse of its stock investments.
After hearing from the Fund officials, Senate President Paul Manglona (Ind-Rota) and Senate floor leader Pete Reyes (R-Saipan) said the Senate will only adopt at this time a conference committee report endorsing passage of a compromise derivative lawsuit bill.
The Senate originally intended to act on the House-Senate compromise bill yesterday and was poised to pass it.
Senators told Retirement Fund officials that they will further review the bill, given the filing of a counterclaim.
Fund’s Igisomar said their new investment consultant, Wilshire Associates, said it will “revisit” its contract if the beneficiary derivative act measure is signed into law.
The Senate rejected the House version of SB 17-43, leading to the formation of a conference committee.
The Senate and House conferees recommended passage of a compromise bill that the Senate held off action on yesterday.
