The Denis P. Mullaney, et al. v. Principal Global Investors, et al. Complaint was filed in the United States District Court for the Southern District of New York on December 4, 2009, on behalf of Plaintiff Mullaney and a group of investors in the Principal U.S. Property Account (the “Property Account”), a real estate separate account managed by Principal. On January 4, 2010, Mullaney was consolidated with other similar cases in the Southern District of New York and is now referred to as In re Principal U.S. Property Account Litigation, Master File No. 09-cv-9889. Additionally, Plaintiffs Denis P. Mullaney and Eric Cruise were named as Interim Lead Plaintiffs. Keller Rohrback was designated as Interim Lead Counsel on February 22, 2010.

The Complaint alleges that Principal breached its fiduciary duties under ERISA by managing the investment of the retirement assets in the Property Account inconsistently with the Property Account’s stated objective to maintain adequate liquidity to provide for daily withdrawals. Principal offered the Property Account to retirement plans throughout the country as a “low risk” retirement savings option with a “strong focus on liquidity.” As a result of its mismanagement, the Property Account maintained insufficient liquidity to meet the withdrawal requests of participants who had invested in the Fund and became high risk by virtue of having insufficient liquidity. On September 26, 2008, Principal imposed a withdrawal freeze, closing the Property Account to withdrawals and locking up participants’ retirement savings in the Fund. By preventing ERISA plans and plan participants from withdrawing their money from the Property Account, Principal forced these investors to sustain staggering losses as the assets in the Fund declined in value.

Accordingly, Plaintiff alleges that Principal, as the investment fiduciary for the Property Account for ERISA retirement plans throughout the country, and Principal’s employees who were responsible for managing the assets invested in the Property Account, breached their duties of prudence, loyalty, and exclusive purpose under ERISA § 404(a) by recklessly and imprudently investing the assets of the Property Account in a manner contrary to the stated objectives of the Property Account.

Please refer to the Case Documents below or Contact Us for more information.

Case Documents