Frequently Asked Questions

1. What is a class action?

In a class action, one or more individuals file a lawsuit on behalf of a class of many other individuals who have similar claims. Here, David Burnett and David Nelson, two former employees of WGA who held WGA stock in their ESOP accounts, have brought this case seeking to represent all participants in the ESOP.

2. Who is a member of the Class?

The Class is defined as: “all participants and beneficiaries of the Western Global Airlines, Inc. Employee Stock Ownership Plan at any time since its inception, excluding Defendants, their family members or beneficiaries.”

Because this Lawsuit will be certified as a mandatory (“non-opt-out”) class action, you cannot exclude yourself from the Class or the benefits of the Settlement.

3. What is this lawsuit about?

This lawsuit was filed in 2022 on behalf of participants in the WGA ESOP and their beneficiaries (the “Lawsuit”). The Lawsuit asserts claims against Prudent Fiduciary Services LLC, Miguel Paredes, James K. Neff, Carmit P. Neff, James K. Neff Revocable Trust Dated 11/15/12, Carmit P. Neff Revocable Trust Dated 11/15/12, Kelly S. Neff Trust Dated 1/1/10, Danielle J. Neff Trust Dated 1/1/10, and WGA Trust Dated 8/16/13. The Lawsuit is pending in the U.S. District Court for the District of Delaware.

The Lawsuit asserts that Defendants violated a federal statute, the Employee Retirement Income Security Act of 1974 (“ERISA”), in connection with the ESOP’s purchase of WGA stock in 2020 for approximately $510 million (the “ESOP Transaction”). Plaintiffs allege that the ESOP paid more than fair market value for WGA stock. Specifically, the Lawsuit alleges that Defendants violated their duties under ERISA § 404, 29 U.S.C. § 1104, ERISA § 405, 29 U.S.C. § 1105, ERISA § 406, 29 U.S.C. § 1106, and ERISA § 410, 29 U.S.C.§ 1110 in connection with the ESOP’s purchase of WGA stock.

4. What are the Defendants’ Positions Regarding the Allegations?

The Defendants deny all the allegations in the Lawsuit, none of which have been proven, deny any wrongdoing regarding the ESOP Transaction, and have vigorously defended the Lawsuit.

Defendants James K. Neff, Carmit P. Neff, James K. Neff Revocable Trust Dated 11/15/12, Carmit P. Neff Revocable Trust Dated 11/15/12, Kelly S. Neff Trust Dated 1/1/10, Danielle J. Neff Trust Dated 1/1/10, and WGA Trust Dated 8/16/13 (collectively, the “Shareholder Defendants”) assert that they have not violated any federal statute and deny that the ESOP paid more than fair market value for WGA stock. The Shareholder Defendants further assert that the only valuation information made available to them demonstrated that the WGA stock was being purchased for less than fair market value and that the independent third-party valuation conducted as of December 31, 2021, based on WGA’s operating performance for the first full year after the ESOP purchased the WGA Stock, reflects that the value of WGA Stock increased by 31%. The Shareholder Defendants assert that the purpose of the ESOP was to grant beneficial ownership in WGA to all of its eligible employees, at no out-of-pocket cost and without modification to existing employee benefit programs, such as the 401(k), and that the ESOP was an incremental employee benefit structured so that neither the ESOP nor the ESOP participants expended cash to satisfy ESOP funding obligations. The Shareholder Defendants summarily assert that they acted in good faith, in the best interests of WGA and the ESOP Participants, followed all of the recommended best practices – including those supported by the U.S. Department of Labor, and relied upon exceptionally qualified experts and advisors, in full compliance with all ERISA and ESOP requirements. The Shareholder Defendants further assert that they did not breach any fiduciary obligations, were not involved in the selection of the independent ESOP Trustee, and did not determine the value of the ESOP Shares which was independently and exclusively done by the ESOP Trustee.

Defendants Miguel Paredes and Prudent Fiduciary Services, LLC (collectively, the “Trustee Defendants”) also deny that they have any liability to any of the WGA ESOP participants. The Trustee Defendants assert that they acted prudently, in good faith, and in the best interests of the WGA ESOP participants in connection with the ESOP Transaction, engaged in a thorough due diligence process prior to the ESOP Transaction with the assistance of highly-qualified financial and legal advisors, and zealously negotiated the terms of the ESOP Transaction on behalf of the ESOP. The Trustee Defendants further assert that the ESOP Transaction purchase price was within the range of fair market value for WGA’s stock, and that the Trustee Defendants complied with ERISA and all other applicable laws with respect to the ESOP Transaction.

5. Why is there a Settlement?

The Court did not decide in favor of any party. Instead, Plaintiffs and the Defendants have agreed to a settlement of Plaintiffs’ claims. That way, both sides avoided the cost and risk of a trial of those claims, and Class Members will get the value of the Settlement now, rather than continuing with the litigation where there is a chance the Class would receive nothing (i.e., if Plaintiffs ultimately lose the case). The Class Representatives and Class Counsel think the Settlement is in the best interest of all Class Members.

Notwithstanding the Shareholder Defendants’ belief that they will prevail in the Action, they have agreed to this Settlement to fulfill their expressed intention of providing consideration to the Western Global ESOP Plan participants and their beneficiaries and to stop the significant time and expense attendant in protracted litigation and distraction from focusing their efforts on WGA’s success. The Trustee Defendants also believe that they will prevail in the Action but have agreed to this Settlement to avoid the significant time and expense attendant in protracted litigation.

6. Why did I get a Notice?

You received a Notice because, according to the ESOP’s records, you are believed to be a Member of the Class. The Court has ordered that the Notice be sent to all Class Members to provide you with information about the Settlement and to inform you of your right to object to the Settlement and/or the motion for attorneys’ fees, expense reimbursements, settlement administration costs, and service awards to the Class Representatives, which are described in the Notice.

7. What does the Settlement provide?

If the Settlement is approved, the Defendants will pay a total of $14,500,000 (the “Settlement Amount”) into an escrow account. After deducting any court-awarded attorneys’ fees, expense reimbursements, settlement administration costs, and service awards, the rest of the Settlement Amount (the “Net Proceeds”) will be paid to the Class. Class Members will receive a share of the Settlement Fund in proportion to the number of vested ESOP shares they held. In addition, there may be a second distribution in which any remaining funds from uncashed checks will also be paid to those Class Members who cashed their checks or received rollovers in the first distribution. If there are any funds remaining after this second distribution, they will be sent to the cy pres recipient, the Pension Rights Center.

The amount of attorneys’ fees, expense reimbursements, settlement administration costs, and service awards will be determined by the Court, but attorneys’ fees will not exceed 29% of the Settlement Amount.

These and other terms of the Settlement are summarized in the notice. The terms of the Settlement are set forth in full in two documents: (1) the Class Action Settlement Agreement dated July 8, 2024, between the Plaintiffs and Defendants James K. Neff, Carmit P. Neff, James K. Neff Revocable Trust Dated 11/15/12, Carmit P. Neff Revocable Trust Dated 11/15/12, Kelly S. Neff Trust Dated 1/1/10, Danielle J. Neff Trust Dated 1/1/10, and WGA Trust Dated 8/16/13; and (2) the Class Action Settlement Agreement dated September 20, 2024, between the Plaintiffs and Defendants Prudent Fiduciary Services, LLC, and Miguel Paredes. Collectively, these two documents are referred to as the “Settlement Agreements” or the “Settlement.” The complete Settlement Agreements are located here.

8. How will I get my Settlement benefits?

Under the proposed Settlement, the Net Proceeds will be allocated among Class Members in proportion to the total number of vested shares held in each Class Member’s ESOP account. If the Settlement is approved, all Class Members will automatically be paid their share of the Net Proceeds. Class Members may elect to have their payment deposited into an individual retirement account or other eligible retirement plan (a retirement “roll-over”) by filling out an online Election Form by December 24, 2024. Class Members who do not make this election will receive their payment by check. The full Plan of Allocation is here.

9. Who represents the Class?

The Court has appointed lawyers from the law firms Cohen Milstein Sellers & Toll PLLC, Stris & Maher LLP, Nichols Kaster, PLLP, and Cooch and Taylor, P.A., to represent you and other Class Members. These lawyers are called Class Counsel.

You will not be charged for these lawyers’ services. If you want to be represented by your own lawyer, you may hire one at your own expense.

10. How will the lawyers be paid?

From the beginning of the case, which was filed in 2022, to the present, Class Counsel have not received any payment for their services in prosecuting the case or obtaining the Settlement. Nor have they been reimbursed for any litigation expenses spent prosecuting the case. Class Counsel will therefore apply to the Court for an award of attorneys’ fees and the reimbursement of litigation expenses. The total amount of attorneys’ fees requested will not exceed 29% of the Settlement Amount. The Class Representatives will seek service awards in recognition of the time and effort they expended on behalf of the Class.

You may object to the requested attorneys’ fees, expense reimbursements, settlement administration costs, and service awards through the objection procedures. All requested attorneys’ fees, expense reimbursements, settlement administration costs, and service awards must be reviewed and approved by the Court, and the Court may decide to award less than the requested amount. The Court will consider any objections before deciding the amount of any awards for attorneys’ fees and expenses or service awards.

All court documents related to the motion for attorneys’ fees and expense reimbursements will be posted to here by December 2, 2024.

11. Will the Settlement be reviewed by anyone other than the Court?

Yes. The Settlement Agreements require an experienced Independent Fiduciary to review the Settlement on behalf of the ESOP and Class Members. An Independent Fiduciary is an impartial third party that specializes in ERISA issues and will review the proposed Settlement, including the terms of the Settlement, the value of the Settlement benefits described in Question 7 above, and whether the requested attorneys’ fees, expense reimbursements, settlement administration costs, and service awards are fair and reasonable in the opinion of the Independent Fiduciary. However, the ultimate determination of whether the Settlement terms and attorneys’ fees, expense reimbursements, settlement administration costs, and service awards are fair and reasonable is solely in the discretion of the Court. The Independent Fiduciary will submit a written report with its findings and its conclusion concerning whether the Settlement is fair and reasonable. If the Independent Fiduciary does not agree with any aspect of the Settlement, it will object in writing and explain the basis of that objection. The parties may attempt to resolve the concerns of the Independent Fiduciary if it objects. The Independent Fiduciary’s written report will be filed with the Court before the deadline to object so that the written report may be considered by Class Members and the Court.

12. What happens if you do nothing at all?

If you do nothing, and the Settlement is approved, you will receive the benefits of the Settlement as described in Question 7 above. If you would like to have your payment deposited into an individual retirement account or other eligible retirement plan, then on or before December 24, 2024, you must complete the Election Form online. Class Members who do not elect a rollover will be paid directly by check.

13. May I opt out of the Settlement?

No. If the Court approves the Settlement, you will be bound by it and will receive whatever Settlement recovery you are entitled to under its terms. You cannot exclude yourself from the Settlement, but you may tell Judge Richard G. Andrews what you don’t like about the Settlement by filing an objection on or before December 24, 2024.

14. How do I object to the Settlement?

You can submit written comments or an objection that explains what you do not like about the Settlement. You may also object to the requested attorneys’ fees, expense reimbursements, settlement administration costs, and service awards, but it must be submitted on or before December 24, 2024. Your objection must be in writing, and you must provide the following information to ensure that Judge Andrews receives your objection and can properly consider it:

• Include the case name and number for this Action: Burnett, et al. v. Prudent Fiduciary Services LLC, et al., C.A. No. 1:22-cv-00270-RGA/JLH;

• Your full name, current address, and current telephone number. If you are represented by a lawyer, you need to also provide your lawyer’s name, current address, and current telephone number;

• Explanation of what you do not like about the Settlement or the requested attorneys’ fees, expense reimbursements, settlement administration costs, and service awards, and why;

• A statement of whether you intend to appear at the Fairness Hearing and the name of your counsel, if any, who will be appearing at the hearing;

• A statement of whether your objection applies only to you, to a specific part of the Class, or to the entire Class; and

• Copies of any documents that you believe support your objection.

Again, it is very important that you file your objection on or before December 24, 2024. Failure to submit your objection to the Court and Counsel for the Parties (identified below) by this deadline shall constitute a waiver of your right to object. In other words, you cannot object to the Settlement or the requested attorneys’ fees, expense reimbursements, settlement administration costs, and service awards after December 24, 2024.

On or before December 24, 2024, you must file or mail your objection to the Court at the Courthouse (address below). In addition, you must mail (via U.S. mail) copies of your objection to the Settlement Administrator and to Class Counsel at the addresses below. To ensure prompt receipt of your objection and avoid any mailing delays, you should also email the objection to the corresponding email addresses below.

15. When and where will the Court hold a hearing on the fairness of the Settlement?

The Court will hold a Fairness Hearing on January 14, 2025 at 10:00 a.m., before Judge Richard G. Andrews in the United States District Court for the District of Delaware. The Fairness Hearing will occur at the J. Caleb Boggs Federal Building, 844 N. King Street, Courtroom 6A, Wilmington, DE 19801. At the Fairness Hearing, the Court will listen to any objections, comments, and arguments concerning the fairness of the proposed Settlement and the requested attorneys’ fees, expense reimbursements, settlement administration costs, and service awards.

You do not need to attend the Fairness Hearing. But you are welcome to attend the Hearing to observe or to voice your views about the Settlement or the requested attorneys’ fees, expense reimbursements, settlement administration costs, and service awards. If you plan to speak at the hearing to object, you must file a statement that you intend to appear at the Fairness Hearing on or before December 24, 2024, and include copies of any papers, exhibits, or other evidence you will present to the Court. Your statement of intention to appear at the Fairness Hearing must include all of the relevant information outlined in Question 14 above and must be filed with the Clerk of the Court and sent to the Settlement Administrator, to Class Counsel, and to the Defendants’ Counsel at the addresses provided in Question 14 above.

16. May I speak at the hearing?

Yes, by sending a statement of intention to appear at the Fairness Hearing you are telling the Court that you would like to speak at the hearing. Again, your statement of intention to appear at the Fairness Hearing must include all relevant information outlined in Question 14 and must be submitted according to the process described in Question 14 above.

17. When will I get my Settlement benefits?

If the Judge approves the Settlement after the Fairness Hearing, it is still possible that someone appeals the approval of the Settlement. If that happens, an appeals court will review whether it agrees that the Settlement is fair and reasonable. Appeals take several months and sometimes more than a year to be resolved. Please be patient. If no one appeals the Judge’s approval of the Settlement, the Settlement Administrator will begin distributing the benefits described in Question 7 approximately 60 days after approval is granted. If you elect a rollover into another retirement account, there may be an additional delay for the payment to process.

18. What is the effect of Final Approval of the Settlement?

If the Court finds that the Settlement is fair and reasonable, a final order and judgment dismissing the case will be entered in the Action. All of the Court’s orders will apply to you and legally bind you, including the release of claims outlined in the Settlement Agreements, which can be found here.

If the Settlement is approved, no Class Member will be permitted to continue to assert the Released Claims in any other litigation against the Released Parties. If you do not like any aspects of the Settlement Agreements or the requested attorneys’ fees, expense reimbursements, settlement administration costs, or service awards, you may object as described in Question 14 above.

If the Settlement is not approved or is only approved in part, the case will proceed as if no settlement had been attempted or reached as to any potion not approved, and there is no assurance that Class Members will recover more than what the Settlement provides, or anything at all.

19. Where can I get additional information?

This website and the Notice provides only a summary of information about the Settlement. For more detailed information, you may review the Settlement Agreements and other important court documents filed in connection with the proposed Settlement here. You can also get more information by calling the Settlement Administrator toll free at (833) 285-3378. The Settlement Agreements and all other pleadings and papers filed in the case are also available for inspection and copying during regular business hours at the office of the Clerk of Court, located at 844 N. King Street, Unit 18, Wilmington, DE 19801-3570.

Please do not contact the Court, Defendants, or WGA with questions about the Settlement. If you have questions, you can call (833) 285-3378 or send an email with your questions to info@WGAESOPSettlement.com.

20. What if my address or other information has changed or changes?

It is your responsibility to inform the Settlement Administrator of your updated address or other information. You may do so by email to: info@WGAESOPSettlement.com or by U.S. Mail to the following mailing address:

Burnett v. Prudent Fiduciary Services, LLC,
c/o Settlement Administrator
P.O. Box 26170
Santa Ana, CA 92799