A former Orlando-based Walt Disney Co. employee has sued the committee that deals with workers’ retirement plans, saying it made unwise investment decisions.
Specifically, the federal lawsuit targets the Disney committee over its investment in the Sequoia Fund, which lost $2 billion after one of its biggest stocks tanked.
Patricia Du Vall is the plaintiff in the lawsuit, filed last week in California. She is a former IT analyst at The Walt Disney Co., according to her LinkedIn profile.
The lawsuit, which seeks class action status, also names as defendants several individual Disney executives who are committee members.
A Disney spokesman had no comment.
The committee invested in the fund and also gave employees the option of investing in it, one of Du Vall’s attorneys said.
Valeant Pharmaceuticals represented more than 30 percent of the Sequoia Fund’s assets, the lawsuit said. Valeant’s shares were more than $250 in August. Today they are at about $20. The company has had numerous problems in recent months including debt, federal probes of accounting and pricing practices, and shareholder lawsuits.
On May 31, Sequoia announced it sold half of its Valeant holdings, the lawsuit said. By that point, however, Valeant’s stock had already dropped by almost 90 percent in less than a year.
The committee “clearly knew or should have known that the Sequoia Fund was an imprudent investment,” the lawsuit said. “A prudent fiduciary would have recognized that….the Plan’s significant investment of employees’ retirement savings in the Sequoia Fund would inevitably result in devastating losses to the Plan and, consequently, to the Plan’s Participants.”
Du Vall’s attorney declined to say how much the value of her retirement plan declined.
A similar lawsuit against the Disney committee was filed earlier this year.
Shareholders have also directly sued the investment firm that runs Sequoia Fund for investing too heavily in Valeant.
