For those of you interested in the developing law pertaining to ERISA fiduciary responsibility of directed trustees, please note this recent federal district court opinion from the Eastern District of Virginia–DeFelice v. US Airways. Plaintiffs in the case had brought a class action lawsuit against US Airways and Fidelity, the directed trustee, seeking to recover losses to the Plan resulting from the diminution in value of US Air Group stock between August 1, 2001 and August 11, 2002, the date of the bankruptcy filing.

One of the key facts of the case as cited by the court was that “the Company Stock Fund remained an investment option available to Plan participants throughout the period of US Airways’ descent into bankruptcy.” The court noted that “[d]uring most of the pre-bankruptcy period, in fact, the Company Stock Fund regularly increased its holdings in US Air Group stock.” Also, of note, was the fact that the Company hired an independent fiduciary in 2002 which immediately upon appointment ceased purchasing the stock and began liquidating the “shares then held to the extent possible without adversely affecting the stock’s market value stock.”

The court framed the issue before the court as “whether a directed trustee under ERISA