A judge's ruling Friday brings to a close a bitter two-year battle over lost retirement benefits for thousands of former workers of the collapsed Piggly Wiggly Carolina Co.
Up to 6,600 ex-employees will split up to $8.7 million after a federal judge ruled Friday the proposed settlement reached earlier this year is fair. About one-third of the settlement will pay for the plaintiffs' attorney fees, leaving the average payout per employee at less than $1,000.
The former Pig workers claimed in a lawsuit filed in May that company executives of the once-prominent supermarket chain carted off millions of dollars while their retirement benefits evaporated.
One longtime worker likened the company's implosion and the ensuing legal tussle to a Greek tragedy.
U.S. District Judge Richard Gergel ruled on the merits of the proposed deal after a 90-minute hearing between the Charleston-based company's employee-owners and its senior management team.
Gergel called it "an imperfect remedy," but added, "I find the settlement is fair and adequate and reasonable."
He also said he believed that had the case gone to trial, where close to $30 million would have been sought, it most likely would have ended in a similar outcome.
The first payouts for workers in the company's employee stock ownership plan should begin by mid-fall, plaintiffs attorney Eric Amstutz said after the hearing. Awarded amounts will be based on each employee's losses.
Under the settlement terms, CEO David Schools and two other senior executives would pay $3.45 million and admit no wrongdoing.
They also would sell land they own in Savannah valued between $975,000 and $1.95 million and put the proceeds toward the settlement. Company insurance funds and other sources would bring the total to between $7.65 million and $8.65 million.
Schools was the only former company executive to attend the hearing. He declined to comment after the ruling.
Of the nearly 6,600 potential class members, eight people filed objections to the settlement, said attorney John Moylan of the Columbia law firm Wyche P.A., which filed the case.
"Class counsel respectfully believe that none of these objections warrants reconsideration of the settlement," Moylan wrote in a court brief. "The scarcity of objections to this settlement, particularly given the thousands of individuals who received notice of it, suggests 'broad, class-wide support for the settlement and supports its approval.' "
The lawyer maintained most of the objections centered on criticizing the monetary value of the settlement as too low in comparison to perceptions of wrongdoing by Piggly Wiggly Carolina executives.
One of the objectors was former company spokeswoman Rita Postell, who retired after 40 years only to see her benefits shrivel, she said in a letter about the settlement before the hearing.
Postell said part of her job was to visit the company's stores across South Carolina and Georgia and reinforce the benefit of the company's employee stock ownership plan.
"Not only was I deceived, but the many employees that believed in what I promoted were deceived as well," she said. "It appears many of us were puppets in a Ponzi scheme (of) sorts."
She also believes that not only was the settlement amount too low, but the company's executives should be held accountable.
"The admission of wrongdoing should definitely be included in this settlement if there is to be justice," Postell said. "The company's executives were siphoning the company's worth into their personal worth. The lies told were a sham and never had any consideration for employees."
Only one former employee spoke during the hearing.
Joe Pinto, an ex-refrigeration worker of nearly 39 years, objected to the settlement as unjust.
"We were betrayed, and profits were manipulated," Pinto said. "They walked away with millions while the employees walked away with pennies."
Dana Spires of Summerville, one of the plaintiffs who brought the class-action suit, said after the hearing she believes the settlement is fair.
The former order selector of nearly 29 years added that had the case gone to trial and possibly resulted in a higher financial judgment, "I still would not have felt whole because of all the people who lost money."
Glenn Grant of Hollywood, another original plaintiff, also agreed with the terms.
"I'm going along with it," he said. "What else could I do?"
Mike Pierce, a former employee who worked in different areas for 28 years until he was laid off when the company collapsed in 2013, said he received about $9,000 of the $80,000 he had amassed in the stock ownership plan.
He, too, agreed with the lawsuit's outcome.
"I think it's the best of a bad deal," he said. "I think this whole thing is like a Greek tragedy."
Moylan agreed the former employees have a right to feel betrayed and expressed sympathy for their losses.
"Do I think they are entitled to more?" he told the judge. "Absolutely."
Given the complexities of the case, he believed the outcome to be correct.
"I think this is a significant win for the plaintiffs," Moylan said.
Founded in 1947 by Joseph T. Newton Jr., Piggly Wiggly Carolina became the largest franchiser of Piggly Wiggly stores in the nation, with more than 100 spread across the Carolinas and Georgia.
Over time, the Newton family sold ownership shares to an employee-stock ownership plan, or ESOP, gaining millions in the process. For their part, employees accumulated money that they could cash out when they retired. Over and over, the company officials urged employees to work harder because they now "owned a share."
But Piggly Wiggly's fortunes unraveled in the mid-2000s as the company's second-generation managers turned over the reins to the third. Employees watched their stock-ownership accounts, similar to pensions, dry up as the chain shuttered one store after another or sold them off.
Company leaders blamed competition from Walmart, Target and other chains. But the lawsuit painted a portrait of greed and betrayal — of company executives who took hefty bonuses as the company wound down and siphoned money in other ways.