NJ To Sue Qwest, EDS, Sears, Tyco Over Pension LossesNov 25, 2002 | Dow Jones
New Jersey said Monday it plans to sue four companies it alleges are partly responsible for enormous losses the state's pension fund has sustained.
Qwest Communications Inc. , Electronic Data Systems Corp., Sears Roebuck & Co. and Tyco International Ltd. are the companies the state plans to target.
New Jersey Gov. James E. McGreevey, Attorney General David Samson and State Treasurer John McCormac announced at a new conference that in the next two days they will bring suit against the companies.
They called the companies "corporate defendants responsible for more than $150 million in state pension system losses..."
The state will "seek to recoup enormous losses that allegedly resulted from misconduct by the defendants and certain of their corporate officers," the officials said in a prepared statement
New Jersey's pension fund has lost $20 billion over the past three years, and more than $6 billion in the last quarter.
Steven Kornrumpf, the state's top pension official, resigned Nov. 15. Kornrumpf was director of the Division of Investment, which manages the state's investment portfolio and pension fund.
The state's Investment Council, which sets investment policy, last week recommended to Treasurer McCormac that Peter Langerman be named Kornrumpf's successor on an interim basis. Langerman was most recently chief executive of Franklin Mutual Advisers, a mutual-fund company based in Short Hills, N.J.
The Council said at a meeting last week that it will mount a nationwide search for a permanent replacement for Kornrumpf.
New Jersey said in the statement Monday that it has retained outside counsel to handle the planned lawsuits, which it characterizes as securities fraud cases.
Samson said additional cases related to losses in the state's investment council will soon be filed with the assistance of outside counsel.
He said the state has retained attorneys who specialize in the highly technical area of securities litigation practice in an effort to recover the pension losses.
"These lawsuits will send a powerful message to corporate leaders, on behalf of all investors, that those who commit securities fraud will face the consequences," Gov. McGreevey said in the release.