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HomeMy WebLinkAbout2006-11-30 MinutesFiremen's Pension and Relief Fund Board of Trustees Meeting Minutes November 30, 2006 Page t of 7 Firemen's Pension and Relief Fund Meeting Minutes November 30, 2006 A meeting of the Fayetteville Firemen's Pension and Relief Fund was held at 11:00 AM on November 30, 2006 in Room 326 of the City Administration Building Marion Doss called the meeting to order Present: Marion Doss, Ronnie Wood, Ted O'Neal, City Clerk Sondra Smith, City Attorney Kit Williams, and Trish Leach, Accounting. Absent: Mayor Coody and Pete Reagan. Approval of the October 26, 2006 Meeting Minutes: Ronnie Wood moved to approve the October 26, 2006 Meeting Minutes. Ted O'Neal seconded the motion. Upon roll call the motion passed 4-0. Mayor Coody and Pete Reagan were absent. Approval of the Pension Lists: Approval of the December, 2006 Pension List — No Changes Ronnie Wood moved to approve the December, 2006 Pension List. Ted O'Neal seconded the motion. Upon roll call the motion passed 4-0. Mayor Coody and Pete Reagan were absent. New Business: Dennis Ledbetter Resignation Marion Doss: Is there a copy of his resignation letter in the packet. Sondra Smith: Yes, but he did not state his reason for resigning in it. I am going to try to call him. I've called a couple of times and haven't been able to catch him in the Fire Marshall's office. I may have to call him at home after hours. Ron Wood: Do we want to table this? Can we do that? What do we need to do, have an election? Firemen's Pension and Relief Fund Board of Trustees Meeting Minutes November 30, 2006 Page 2 of 7 Sondra Smith: I don't think we have to have a motion. I would rather you guys talk to him and see if he will stay on the Board. Marion Doss: Could we not take any action on this. Do we need to appoint someone or have a new election? I would rather have an election. Sondra Smith: I don't think you can appoint. I think you have to have an election. In May we will be doing the election's so the person that is selected will have to be reelected. Marion Doss: That's right Dennis's term was up in May. Sondra Smith: Yes. So if you can talk him into serving until May it would be a lot better. That's what I was going to try to do when I talked to him. Marion Doss: Let's just table this until you get a chance to talk to him and maybe we can talk him into serving until May. Sondra Smith: That would be great. Ashland Management Letter Sondra Smith: Ashland Management sent a letter stating they will be contacting us about coming to one of our meetings to talk to us about their stocks. Basically they want to become our investment advisors. I know that you are probably not interested in changing. Marion Doss: Right, we are not. Will you send them a nice letter thanking them, if it meets everyone else's approval and tell them we are not interested in changing. Ted O'Neal: We will keep their name on the list. Marion Doss: Yes, very good. NCPERS Information on Pension Protection Act of 2006 Sondra Smith: This has to do with a new act that they are trying to pass. I didn't get it until November 27th so I haven't really had time to go in depth over it but I wanted you to have a copy to review. Marion Doss: We can just review that in our own time. Firemen's Pension and Relief Fund Board of Trustees Meeting Minutes November 30, 2006 Page 3 of 7 Old Business: City Attorney Kit Williams Report on Baxter International Lawsuit Kit Williams: I've been in contact with the attorneys representing you in this class action suit. We've had to submit another affidavit. I submitted one and we have had another one submitted by the Mayor to the judge in order to try to become a lead plaintiff for this particular case. We haven't heard yet if the judge is going to let us. The retirement system in Alaska is also asking to be the lead plaintiff. They have I think $500,000,000 in assets, of course they have more people. We are trying to be co -plaintiffs with them. At this point in time the judge hasn't made a ruling to my knowledge about whether or not they are going to let us be lead plaintiffs which is not critical for us because we will be plaintiffs regardless. It's much more critical to the attorneys representing us because if we are the lead plaintiff then our attorneys are going to be entitled to some of the attorneys fees if they are successful. If they are not successful then we won't owe anything and they will not receive anything and in fact they will be out their costs because they agreed not to charge us for the cost. Appointment of Pension Board representatives for the Baxter International lawsuit case Kit Williams: One thing we need to do or start thinking about is to designate who among the board should be our court official representative if the defense wants to ask questions or ask for a deposition of a person. Basically what would happen in that particular case is that the deposition might be done in a different location and if so then our attorneys would be responsible for getting our person to the location and paying their expenses because that is part of the litigation costs. They would also work with this particular person to make sure they were really up on all the facts involved in this. I've read the complaint very carefully myself and the basic issue is that the head people in the corporation were giving these rosy scenarios about growth and they continued to give the same rosy scenario for an eight or nine month period even after they should have know better. Also during this seven month period which is the key period for this suit a bunch of those people sold a whole bunch of stock that they had and made millions of dollars selling the stock. Then finally they had an announcement that came out and said we didn't meet our expectations and the stock went down about 20-25% in one day. That was kind of the red flag that got people looking and that's why this suit began. This was back in 2001 or 2002. Those were the basic allegations that these people were at the same time trying to buy another company and they were trying to use their own stock to buy this other company and therefore it was at their advantage that the stock be valued higher so they would have to pay less stock to buy this other company. Those are the two allegations that the head people intentionally deceived the normal stock owners like us. We owned stock at the time. We only potentially lost about $13,000 so it's not a giant hit for us. We didn't own that much stock but that is still a substantial loss and right is right and wrong is wrong. If our attorneys can prove that these people knew what they were doing and intentionally mislead investors then they should have to give back some of the additional profits they made. Firemen's Pension and Relief Fund Board of Trustees Meeting Minutes November 30, 2006 Page 4 of 7 Marion Doss: How many Alaska employees did you say were involved? Kit Williams: I really don't know. I've been in communication with their head attorney but I haven't really asked him. I did note from their pleadings that they had a substantially larger pension fund. That's a state pension fund it's some sort of an employee pension. I can't remember which group of employees it was in Alaska. Marion Doss: The Alaska Labors Employer's Retirement Fund. Did you say a dollar amount approximately? Kit Williams: I thought they had $500,000,000 in their total pension fund. Marion Doss: Looks to me like and we don't know what the judge is going to do but $500, 000,000 verses us. Kit Williams: We are doing this jointly. Marion Doss: Okay. Kit Williams: We are saying we want to be co -plaintiffs that our attorneys and their attorneys will work together. I've read the documents to try to stay up on it and I read our motion that our attorneys did to allow us to be plaintiffs and I saw the defense response to that. The defense response to that included an article out of Fortune magazine that was attacking the ethics in the work history not of our attorneys but of the attorneys representing Alaska. This firm is one of the biggest firms that does this. They kind of almost to some extent invented this way to go after corporations and they have made millions of dollars. One of the firms has been investigated and has been charged with federal crimes. I don't think there has been any judgment against this particular one and they are fighting it asserting that they are innocent. They are alleged to have made pay offs to lead plaintiffs. The law has been changed to make it where they want institutional groups to be lead plaintiffs like us as opposed to an individual. What was alleged is that these individuals, once this new cause of action occurred, they would buy a whole bunch of their company's stock then after some event happened and the stock took a dive, which might have indicated that the company wasn't giving proper warnings and maybe there was some misbehavior, they would go and contact this particular law firm that specialized in this. The problem was that the law firm was probably sharing the attorneys fees with this investor. The investor is only supposed to get back what he lost he is not supposed to be getting a bounty. One thing I put in our affidavit is we assured the court that we are not a repetitive plaintiff, we are an investment board, we found out about this and our attorneys advised us about it. We felt like it was reasonable for us to go forward with it if our attorneys were correct. Marion Doss: Sounds like we just need to wait and see what the judge decides on that part of it. Kit Williams: I think that's correct. Assuming that we are one of the co -lead plaintiffs one of the members of this board will need to be appointed to be your official representative. I will work with that board member and have our other firm work with them and make sure they can Firemen's Pension and Relief Fund Board of Trustees Meeting Minutes November 30, 2006 Page 5 of 7 stay on top of everything and truly understand this case enough because we are required as lead plaintiffs to give direction to our attorneys. That's one reason why I read the defense response. I didn't want to just read what our guys were saying, I wanted to see what the guys against us were saying too and it was an eye opener. Marion Doss: So if we get to that point we need to select someone that likes to travel. Kit Williams: Someone that has had experience or at least that's not going to be intimidated. Sondra Smith: And has time. Kit Williams: And has time. We have some that are retired. Sondra Smith: Do we need to go ahead and appoint someone today? Kit Williams: No. We are missing three members. Pete's not here but he is still a member right? Marion Doss: Yes. Kit Williams: At this point we haven't received any notice of deposition. Since we meet every month there is not an immediate rush but let's leave this on old business. Sondra Smith: Okay. Kit Williams: So you'll can think about it and talk to Pete. Is Ledbetter gone? Marion Doss: He sent a letter of resignation. We are just going to put that on hold and talk to him and see if there is a reason. Sondra said his term was up in May. I wanted to ask if he would finish out his term. Can we appoint someone to the remainder of his term or do we have to have a special election? A special election is okay with me. Kit Williams: That's just a hassle for the clerk but I don't know of anything in there that talks about appointment. Marion Doss: I don't recall either. We have done that a time or to. I kind of wondered at the time. Kit Williams: The only thing that makes me nervous about appointing someone is if we then needed that signature in a critical decision. Then it is possible that that person could be challenged. Marion Doss: That concerns me too. Ron Wood: I think it would be good to elect someone. Firemen's Pension and Relief Fund Board of Trustees Meeting Minutes November 30, 2006 Page 6 of 7 Marion Doss: I do to, I really do. There is always a chance that someone would say, if you appointed someone, that you appointed them so they would go along with your point of view or something like that. Sondra Smith: I don't mind doing elections but if we could talk Dennis into staying until May I think it would be better for the board. He may choose not to do that. Marion Doss: Who knows what's happened. Why he feels like he can't continue. Kit Williams: I don't have anything else on Baxter. Marion Doss: I appreciate the information on this. It sounds like mainly it's a business deal for the attorneys. Kit Williams: In reality I think a lot of times in class action suits the attorneys get more than anybody else. The city has agreed to authorize some attorneys to represent us in a potential sales tax and HMR tax class action suit against some internet companies who might not be paying the full amount of sales tax and HMR tax to the city as they are suppose to. I have seen class actions with just consumers and basically the consumer gets nothing. You get a certificate of 50% off or something. It's so worthless you don't even apply for it. I think in both of these cases that the city is getting involved with we see a chance to recover real money. Although if it is a class action the attorneys are going to make more than anybody if they are successful. Marion Doss: I guess the main thing on this is our responsibility to recover any money that may have been lost even if it is a small amount. That's the way we really need to look at it. Trish Leach: We receive on a regular basis class action letter notifications that there has been a suit for some reason and we research it and if we have the records we will pull the files and if you lost money we will pull what you bought, what you sold and file those. Sometimes we will get a check for a dollar or sometimes thirteen cents. Any time anyone approaches us and says there is a class action suit we feel like if you all get any money from it pulling the records is what we are supposed to do. If we don't have the records then Longer has them and they pull the files and file. Kit Williams: Hopefully it will be more than that. Trish Leach: I would hope it would be more than that. Kit Williams: If they actually ever approve the case and prove that we lost $13,000 then we should get about $8,000 back. Some of it will be used up with expenses and one third will go to the attorneys but at least we would get some dollars back so it is not like it's not worth pursuing. Firemen's Pension and Relief Fund Board of Trustees Meeting Minutes November 30, 2006 Page 7 of 7 COLA Sondra Smith: I have not received the cash flow report back. Marion Doss: I don't expect to hear from that for a while. Sondra Smith: I don't either. Longer Investments: Equity Overage Approval — 52.8% Sondra Smith: Longer Investments sent a copy of the overage. As you know they can go plus or minus 5% from the 50% and they are at 52.8%. So we need to approve the equity overage. Ted O'Neal moved to approve the 52.8% Equity overage. Ronnie Wood seconded the motion. Upon roll call the motion passed 4-0. Mayor Coody and Pete Reagan were absent. Monthly Report Kit Williams: Looks like we have received $408.95 from the Bristol Myers litigation. Trish Leach: If Longer fills out the paperwork it goes straight back to them we don't always see that and if we fill out the paperwork the check will come to us. Sondra Smith: The yield last month was 3.7%. Meeting Adjourned at 11:50 AM