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News Release

Nationsbank And Investment Advisor Restore Assets To Polaroid Retirement Plan

Archived News Release — Caution: Information may be out of date.

The U.S. Department of Labor has obtained a settlement agreement providing for Nationsbank of Georgia, N.A., a subsidiary of Nationsbank of Charlotte, N.C., to distribute over $5 million in cash and stock to the accounts of certain participants covered by the Polaroid Employee Stock Ownership Plan.

Under the agreement, the bank will distribute the cash and stock to participants covered by the plan as of April 1989.

The settlement resolves a lawsuit filed in June 1992 against the bank and its investment advisor, Sovran Capital Management Corp. -- the successor to Citizens and Southern Investment Advisors, Inc. (CSIA) in connection with Polaroid stock owned by the ESOP.

The ESOP was created in 1988 with $15 million in cash and $285 million in loan proceeds to purchase stock of Polaroid. Shortly after creation of the plan, Polaroid was the subject of an unsolicited takeover offer. The company subsequently purchased up to 16 million shares of its own stock at a premium price of $50 per share at a time when the stock was trading at $40 per share. Nationsbank's predecessor, Citizens and Southern Trust Company (Georgia) was trustee of the Polaroid plan.

In its lawsuit, the department alleged that Nationsbank and its investment advisor violated the Employee Retirement Income Security Act in connection with tendering the stock to Polaroid. The bank, the lawsuit alleged, did not adequately investigate the merits of tendering the stock owned by the ESOP to Polaroid and failed to monitor the performance of investment advisor CSIA. The lawsuit also alleged that the bank imprudently failed to tender certain stock to Polaroid.

CSIA allegedly failed to adequately analyze the merits of the Polaroid offer to buy back plan shares in order to properly advise the trustee on whether to tender the ESOP shares.

The settlement was entered on May 17 in federal district court in Atlanta.

(Herman v. Nationsbank of Georgia, N.A.)
Civil Action No. 1 92-CV-1474-HTW

U.S. Department of Labor news releases are accessible on the Internet. The information in this news release will be made available in alternate format upon request (large print, Braille, audio tape or disc) from the Central Office for Assistive Services and Technology. Please specify which news release when placing your request. Call 202.693.7773 or TTY 202.693.7775.

Archived News Release — Caution: Information may be out of date.

Contact Name: Gloria Della
Phone Number: 202.219.8921

Employee Benefits Security Administration
May 18, 1999
Release Number