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Holy Cross Hospital Settlement

Welcome to the Butler v. Holy Cross Hospital Settlement website. This website is intended to keep class members informed regarding the Class Action Settlement of the case Butler, et al. v. Holy Cross, et al., No. 16-05907 (N.D. Ill.). While the District Court approved the Notice of Proposed Settlement, the content of this website is the responsibility of Plaintiffs’ Counsel, and has not been approved by the Court.

The Court granted final approval of the Settlement of June 29, 2017. The Settlement is now final.

Background

This case was filed in federal district court in Illinois on June 6, 2016 against Holy Cross Hospital (“Holy Cross”), Sinai Health System (“Sinai”) and various individual defendants (collectively, “Defendants”). The case relates to the Pension Plan for Employees of Holy Cross Hospital, a defined benefit pension plan.

The complaint alleged that Defendants denied the Plan’s participants and beneficiaries the protections of the Employee Retirement Investment Security Act (“ERISA”) by claiming that the Plan was a “church plan,” and therefore exempt from ERISA. The complaint alleged that because the Plan is not a “church plan,” Defendants violated ERISA in a variety of ways. The complaint also alleged that application of the church plan exemption to the Plan would violate the Establishment Clause of the Constitution.

Shortly after the complaint was filed, the parties agreed to put the litigation on hold while they went to mediation. While the litigation was on hold, the parties actively engaged in settlement negotiations. This included conducting an analysis of Defendants’ financial condition and consulting with professionals about Defendants’ financial condition, as well as participating in two face-to-face mediation sessions with a professional mediator. The parties also spoke telephonically numerous times to agree on the terms of the settlement. Finally, on March 1, 2017, the parties signed a Settlement Agreement, which they filed with the Court for the Court’s approval.

For more information about the history of this case, please visit the Holy Cross Hospital Church Plan Litigation webpage.

The Settlement Class

On June 29, 2017, the Honorable Manish S. Shah issued an Order Granting Final Approval of the Settlement on behalf of the following class:

All Plan participants or Plan beneficiaries who received a distribution from the Plan on December 31, 2015, in connection with the Plan’s intended termination and (i) who were not later identified as having died prior to September 1, 2015; or (ii) who were not included in the Plan’s distribution on December 31, 2015, in connection with the Plan’s intended termination, but who were identified after December 31, 2015, as being eligible for a benefit prior to the Settlement’s effective date. Excluded from the class are the Individual Defendants named in the Complaint.

The Settlement

The Settlement provides for a total of approximately $9 million in exchange for a release of all claims (as defined in the Settlement Agreement) against Defendants.  The approximately $9 million consists of two components.

  • The first is a $4 million payment deposited into an interest-bearing escrow account from which Plaintiffs’ court-approved attorneys’ fees and expense reimbursement, and incentive awards to Named Plaintiffs were paid. This net amount, or “Plan Payment,” will then be contributed to the Plan.
  • The second component is approximately $5.1 million (less amounts for Plan operating expenses) in undistributed assets being held in the Plan Trust (the “Plan Trust Amount”).

Following the Settlement, the Parties anticipate that the total amount that will be available for distribution from the Plan after satisfaction of all Plan expenses necessary to calculate and process the distribution of the Settlement, will be approximately $8.4 million. After this distribution, Defendants intend to fully liquidate and formally terminate the Plan. Distributions of the Settlement will be made only if the final approval order is upheld and there are no appeals.

Released Claims and Fairness Hearing

The Court did not decide who was right: instead, both parties have agreed to the Settlement. The Settlement will avoid the costs and risks of a trial while ensuring that all Settlement class members are treated fairly. The Named Plaintiffs and Class Counsel believe that this Settlement is in the best interest of the Settlement class members.  As a result of the Settlement, the Settlement Class releases the claims against Defendants pertaining to the church plan exemption (these claims are defined in the Settlement Agreement).

The Court held a Fairness Hearing on June 29, 2017, at the U.S. District Court for the Northern District of Illinois and considered the fairness of the proposed Settlement. The Court heard arguments concerning the proposed Settlement’s fairness. The Court granted final approval of the Settlement, and the Settlement is now Final.

Settlement FAQs

Q:  How do I know whether I am part of the Settlement?

The Court has certified the Action as a class action. You are a member of the Settlement Class if you received a distribution from the Plan on December 31, 2015, in connection with the Plan’s purported termination and (i) you were not later identified as having died prior to September 1, 2015; or (ii) you were not included in the Plan’s distribution on December 31, 2015, in connection with the Plan’s intended termination, but you were identified after December 31, 2015, as being eligible for a benefit prior to the Settlement’s effective date; but (3) you are not a member of the Settlement Class if you are a Defendant in this lawsuit.

Q: What does the Settlement provide?

The total Settlement amounts to approximately $9 million.  Defendants are required to deposit $4 million in cash to an escrow account that will be used to settle Plaintiffs’ court-approved attorneys’ fees and expense reimbursement, and incentive awards to Named Plaintiffs. The net amount which remains in the escrow account after payment of Plaintiffs’ fees and incentives, and including interest, will then be contributed to the Plan (the “Plan Payment”).

Upon approval of this Settlement becoming Final, the Plan Payment will be combined with the approximately $5.1 million in undistributed assets held in the Plan Trust (the “Plan Trust Amount”) for distribution to the Class. Following the Settlement, the Parties anticipate that the total amount that will be available for distribution from the Plan after satisfaction of all Plan expenses necessary to provide this class notice and calculate and process the distribution of the Settlement, will be approximately $8.4 million. This combined amount, less amounts for Plan operation expenses, will be allocated and paid to Class Members based upon the same actuarial assumptions and methodologies used for the Plan distributions that occurred in December 2015.

Q: How will the Settlement be distributed?

Members of the Settlement Class do not need to do anything with respect to the Settlement in this Action. Following the Settlement becoming Final, the Parties anticipate that the total amount that will be available for distribution from the Plan after satisfaction of all Plan expenses necessary to calculate and process the distribution of the Settlement, will be approximately $8.4 million.  This total will be allocated and paid to Class Members according to the actuarial assumptions and methodologies used for the Plan distributions that occurred in December 2015.  Thereafter, the Plan will be terminated.

Contact

If you are a Settlement Class member and you have questions regarding your eligibility for settlement amounts or the amounts paid to you from the Plan in December 31, 2015, please call the Holy Cross Hospital Pension Service Center at (888) 414-8820.

For inquiries about this Settlement, please or call Class Counsel at (866) 275-5991 if you have questions or comments.

Please do not contact the Court. Its personnel will not be able to answer your questions.

Case Documents