Warren Buffett’s Berkshire Hathaway Inc. didn’t break promises on retirement benefits to employees of a brick-making business it acquired in 2000, the company said in a challenge to a lawsuit filed last month.
Judy Hunter, the chief financial officer at Acme Building Brands, along with another current and one former employee, sued Berkshire for breach of contract in federal court in Fort Worth, Texas, on Aug. 15.
Hunter and the other plaintiffs claimed Berkshire “instigated changes that caused the 401(k) plan to be underfunded, and to completely freeze the accrual of benefits under the pension plan.” They’re seeking to represent all other participants in Acme’s 401(k) and pension plans.
About 1,558 individuals are participants in the Acme pension plan and 1,010 of these people are participants in the 401(k) plan, according to the complaint. “Many if not all of those persons are likely members of the 401(k) class or the pension plan class,” the plaintiffs’ said in the complaint
The plaintiffs have misinterpreted the agreement to acquire Fort Worth-based Acme, Berkshire said Friday in a statement.
The plaintiffs mistakenly contend that the acquisition “required Acme to permit participants to accrue additional defined benefits forever, at the same rate that benefits were being accrued at the time of the acquisition,” Berkshire said Friday. The plaintiffs also contend the acquisition required “additional 401k matches forever,” at the same rate as the matches in 2000, Berkshire said.
“This interpretation of the acquisition is clearly wrong,” Omaha, Nebraska-based Berkshire said. Berkshire said it “expects that its actions will be upheld by the courts.”
Mark C. Hill, Hunter’s lawyer, didn’t immediately return a call for comment on the lawsuit.
Berkshire pushed Acme to reduce the matching employer contributions for the 401(k) plan to 25 percent from 50 percent, up to 5 percent of an employee’s salary, according to the lawsuit. The suit asks for a judgment restoring the match to 50 percent and reimbursement of gains the higher matches would have made since 2010.
© Copyright 2021 Bloomberg News. All rights reserved.