Stanford v. Foamex L.P. (822 F. Supp. 2d 455, 2011)

MEMORANDUM

YOHN, District Judge.

Plaintiff William Stanford, Jr., filed this class action individually and on behalf of all other similarly situated persons and on behalf of the Foamex L.P. Savings Plan (the “Plan”) under section 502(a)(2) of the Employee Retirement Income Security Act (“ERISA”), 29 U.S.C. § 1132(a)(2). He asserts several claims against Foamex L.P. (“Foamex”), K. Douglas Ralph, Stephen Drap, Gregory J. Christian, and George L. Karpinski (collectively with Foamex, the “Foamex defendants”) and against Fidelity Management Trust Co. (“Fidelity”). Now pending are cross-motions filed by plaintiff and defendants for summary judgment under Federal Rule of Procedure 56. For the reasons that follow, I will deny plaintiffs motion, I will grant in part and deny in part the Foamex defendants’ motion, and I will deny Fidelity’s motion.

I. FACTUAL BACKGROUND AND PROCEDURAL HISTORY

Foamex is a wholly owned subsidiary of Foamex International, Inc. (“Foamex International”), which is engaged in the business of manufacturing and distributing foam products. Stanford v. Foamex L.P., 263 F.R.D. 156, 160 n. 2 (E.D.Pa.2009). Foamex established the Plan to provide retirement income to eligible employees. Plaintiff Stanford is a former employee of Foamex and was a participant in the Plan. (Foamex Defs.’ Statement of Uncontested Material Facts (“Foamex Facts”) ¶ 1.)

A. The Plan

The Plan was a 401(k) defined-contribution, or individual account, plan. The Plan allowed participating employees to make pre-tax contributions, through regular payroll deductions, to their individual accounts and to direct that their contributions be invested in one or more of the available investment options. (Decl. of Richard E. Spoonemore (Jan. 24, 2011) (“Spoonemore Deck”) Ex. A (“Plan”) §§ 3.1, 4.4.) Under the terms of the Plan, Foamex matched the contributions of eligible employees, up to a specified level. (Plan § 3.2.1.) As the Summary Plan Description explained, a participating employee’s account balance was “made up of [his or her] contributions, [Foamex’s] matching contributions, ... and investment earnings.” (Fidelity’s Statement of Undisputed Facts (“Fidelity Facts”) Ex. 7, Summary Plan Description (“SPD”) at 8.) A participant could “[exchange between investment options” and thereby “reallocate savings” in his or her account daily. (Id. at 8, 12.) The Plan made each participant “solely responsible” for investment decisions, and participating employees were informed that “[fiduciaries of the Plan may be relieved of liability for any losses which are the direct and necessary result of investment instructions given by participants or beneficiaries.” (Id. at 7-8.)

The Foamex L.P. Benefits Committee (the “Benefits Committee”), which was to consist of at least three members appointed by Foamex, the Plan sponsor, was the Plan administrator and the named fiduciary of the Plan. (Plan §§ 1.47, 12.3.) Defendants K. Douglas Ralph, Stephen Drap, Gregory J. Christian, and George L. Karpinski were members of Foamex’s senior management and served on the Benefits Committee during the relevant period. (Foamex Facts ¶ 5.) Ralph was an executive vice president and the chief financial officer of Foamex. (Spoonemore Decl. Ex. F, Dep. of Kenneth Douglas Ralph (“Ralph Dep.”) at 9:14-23.) Drap was the vice president of manufacturing for foam products. (Id. Ex. G, Dep. of Stephen Drap (“Drap Dep.”) at 7:21-8:16.) Karpinski was a senior vice president and the treasurer of Foamex. (Spoonemore Decl. Ex. E, Dep. of George L. Karpinski (“Karpinski Dep.”) at 9:11-16.) Christian, who was an executive vice president and Foamex’s general counsel and secretary (Foamex Facts ¶ 6), was the chairman of the Benefits Committee (Fidelity Facts ¶ 4). On July 19, 2005, he was also named chief restructuring officer. (Foamex Facts ¶ 6); Fidelity Facts Ex. 1 (Minutes for the Foamex International Inc. Board of Directors Meeting (July 19, 2005)). Thomas A. McGinley, who is not named as a defendant, was Foamex’s director of compensation and benefits (Spoonemore Decl. Ex. H, Dep. of Thomas McGinley (“McGinley Dep.”) at 9:15-10:8), and served as the Benefits Committee’s secretary, although he was not a member of the committee (Fidelity Facts ¶ 15; Pl.’s Undisputed Material Facts (“PL’s Facts”) ¶ 19). The Benefits Committee had the “complete authority to control and manage the operation and administration of the Plan” (Plan § 12. 1), including the authority to select the investment options available to Plan participants (Plan § 4.4).

Both Foamex, as the Plan sponsor, and the Benefits Committee, as the Plan administrator, had the authority to amend the Plan at any time. (Plan § 13. 1.)

Fidelity served as the Plan’s trustee, pursuant to a trust agreement (the “Trust Agreement”) between Foamex and Fidelity. (Foamex Facts ¶ 3.) The Trust Agreement stated that the Benefits Committee, as the named fiduciary, would direct Fidelity as to the investment options in which Plan participants could invest (Spoonemore Decl. Ex. C (“Trust Agreement”) § 4(b)), and provided that Fidelity would “have no responsibility for the selection of investment options under the Trust and [would] not render investment advice to any person in connection with the selection of such options” (id. § 4(a)). The agreement further provided that Fidelity would not be liable for following a direction of the named fiduciary if the direction was in a writing signed by an authorized signatory and if Fidelity reasonably believed the signature to be genuine, “unless it is clear on the direction’s face that the actions to be taken under the direction would be prohibited under ERISA or would be contrary to the terms of this Agreement.” (Trust Agreement § 7(c)). McGinley was authorized to sign letters of direction to Fidelity on behalf of the Benefits Committee, both in its capacity as named fiduciary and in its capacity as Plan administrator (Fidelity Facts ¶ 18; Spoonemore Deck Ex. L); he was also authorized to act on behalf of Foamex, as evidenced by the fact that he signed the Trust Agreement on behalf of Foamex (Fidelity Facts ¶ 19; Trust Agreement (signature page)).

B. The Foamex Stock Fund

Among the investment options available to Plan participants was the Foamex Stock Fund, a nondiversified stock fund that invested in the common stock of Foamex International. (Plan §§ 1.26, 1.32; Trust Agreement Sched. C.) The Foamex Stock Fund was a unitized fund and also included “cash or short-term liquid investments” in amounts designed “to satisfy daily participant exchange or withdrawal requests.” (Trust Agreement § 4(e).) Accordingly, an investor’s interest in the Foamex Stock Fund was measured in units of participation, rather than shares of common stock, and the value of each unit (the net asset value) was based on the price of the underlying Foamex International common stock as well as the value of the cash held by the fund. (Id.) This unitized structure enabled participants to invest in or transfer their investments out of the fund on a daily basis, rather than having to wait three days, the normal settlement period for purchases and sales of stock. It also allowed Fidelity to offset participant purchases and sales, thereby reducing the Plan’s transaction costs. (Fidelity Facts Ex. 14, Deck & Expert Report of Ellen A. Hennessy & John J. Miller (“Hennessy Report”) ¶ 11.)

The Summary Plan Description explained that “[t]he investment performance of the fund is directly tied to the financial performance of Foamex International Inc. and its subsidiaries, along with general market conditions,” and advised participants that “[b]ecause of the non-diversified nature of this fund, investing in this fund involves a greater element of risk than the other available funds.” (SPD at 7.)

Under section 4(e) of the Trust Agreement, the Benefits Committee, as the named fiduciary, was charged with setting the target cash percentage and drift allowance in the Foamex Stock Fund after consulting with Fidelity. And Fidelity was responsible for ensuring that the amount of cash in the Foamex Stock Fund fell within the agreed upon range. (Trust Agreement § 4(e).) Until July 2005, the Foamex Stock Fund maintained a target cash balance of 5%. (Foamex Facts ¶ 11; Spoonemore Deck Ex. J, Dep. of Elisabeth Pathe (“Pathe Dep.”) at 10:22-11:3.)

The Trust Agreement further provided that the Benefits Committee was responsible for “continually monitor[ing] the suitability under the fiduciary duty rules of section 404(a)(1) of ERISA ... of acquiring and holding” the common stock of Foamex International, and that Fidelity would not be liable for any loss resulting from the directions of the Benefits Committee, as the named fiduciary, with respect to the acquisition or holding of Foamex International common stock, unless it was “clear on their face that the actions to be taken under those directions would be prohibited by [ERISA’s] fiduciary duty rules or would be contrary to the terms of [the Trust] Agreement.” (Trust Agreement § 4(e)(ii).)

C. Foamex’s Financial Difficulties and Actions Taken with Respect to the Foamex Stock Fund

Foamex International and Foamex experienced financial problems, and on March 15, 2005, Foamex International filed a Form 8-K publicly announcing that Foamex had received waivers of compliance with financial covenants from certain of its lenders. (Fidelity Facts Ex. 21.) In its annual report (Form 10-K) filed on April 4, 2005, Foamex International informed investors that it “continue[d] to be highly leveraged and [had] substantial debt service obligations.” (Supplemental Decl. of Richard E. Spoonemore in Supp. of Mot. for Class Certification (July 24, 2009) Ex. E at 9.) The company explained that “[f]or the last three fiscal years we have not generated enough cash flow from operations sufficient to pay our debt service obligations and capital expenditures.” (Id. at 10-11.) On July 11, 2005, Foamex International issued a press release announcing that it had “significantly reduced its earnings expectations for the second quarter of 2005” and that it had retained an investment banking firm “to help evaluate strategic alternatives for strengthening the Company’s balance sheet and enhancing long-term value.” (Fidelity Facts Ex. 39 at 4.) The stock closed at $1,056 per share that day. (Spoonemore Decl. Ex. DD.) Around that time, a liquidity shortage in the Foamex Stock Fund resulted in a suspension of trading in and out of the fund. (Fidelity Facts ¶ 49.)

On July 13, 2005, the Benefits Committee determined that the Foamex Stock Fund was no longer an appropriate investment for Plan participants and decided to close the fund to new investments, but to allow those who had already invested in the fund to maintain their investments in the fund if they so chose. (Spoonemore Decl. Ex. M.) On July 14, 2005, Christian issued a memorandum to Plan participants informing them of this change:

The Benefits Committee regularly reviews the performance of the investments within the Foamex 401(k) Savings Plan to ensure the appropriateness of the options provided to participants. Due to the increasing volatility of the price of Foamex stock, the Benefits Committee has determined that the Foamex Stock Fund may no longer be an appropriate investment for a retirement plan such as the Savings Plan. Therefore, effective immediately, no additional employee contributions or Company Matching contributions will be directed into the Foamex Stock Fund.

(Fidelity Facts Ex. 37.) The memorandum explained that “[t]his action applies only to new contributions. Money that is currently in the Foamex Stock Fund may remain in the Fund or can be moved into other investments within the Savings Plan.” (Id.) On July 20, 2005, Fidelity mailed a letter to participants providing similar information. (Fidelity Facts Ex. 38.)

Fidelity and Foamex promptly amended the Trust Agreement to close the Foamex Stock Fund to new investments and exchanges into the fund. (Fifth Amendment to Trust Agreement.) And the Benefits Committee, acting on behalf of Foamex, amended the Plan. (Plan Amendment No. 4. )

On July 13, 2005, McGinley sent a letter to Fidelity directing the trustee to increase the cash component of the Foamex Stock Fund to 7%, subject to a minimum of 6.5% and a maximum of 7.5%. (Spoonemore Decl. Ex. 0.) The letter, like the subsequent letters from McGinley to Fidelity (discussed below), bore the Foamex logo and the address of Foamex International, Inc., and identified McGinley as the director of compensation and benefits. (See Spoonemore Decl. Exs. O-R, T.) The letter did not specify who was directing Fidelity to increase the cash target, but stated that Fidelity was being directed “[i]n accordance with the Trust Agreement between Foamex International Inc. and Fidelity Management Trust Company,” (the agreement was actually between Foamex L.P. and Fidelity) and that the direction “shall apply until such time as Foamex International Inc. directs [Fidelity] in writing of any deviation to this letter.” (Id.) McGinley testified that Christian, who was an executive vice president and Foamex’s general counsel and secretary (Foamex Facts ¶ 6), made the decision to increase the cash target. (McGinley Dep. at 48:4-17.) And Christian similarly testified that “as an executive of the plan sponsor [Foamex],” he worked with McGinley and Fidelity in making the decision to increase the cash target. (Spoonemore Decl. Ex. D, Dep. of Gregory Christian (“Christian Dep.”) at 35:12-36:5.) (The Foamex defendants explain that “Foamex entrusted Christian with ample authority to make [such] decisions” on behalf of Foamex. (Mem. of Foamex Defs. in Opp’n to PL’s Partial Summ. J. Mot. (“Foamex Opp’n Br.”) at 1.) Plaintiff agrees that Christian took these actions on behalf of Foamex. Because both parties have agreed, I will accept this as true for purposes of these summary-judgment motions.) Although Christian was the chairman of the Benefits Committee, there is no evidence that the committee itself was involved in the decision to increase the target cash balance. (See Karpinski Dep. at 24:14-25:15 (testifying that neither he nor the Benefits Committee was involved in the decision); Ralph Dep. at 22:7-18 (same); Drap Dep. at 14:6-15:10 (same).)

In an August 15, 2005, press release, Foamex International announced that it was involved in negotiations with certain of its creditors. The company explained that “the restructuring of [its] balance sheet [might] be implemented by means of a case under chapter 11 of the Bankruptcy Code, possibly through a pre-arranged plan of reorganization.” (Fidelity Facts Ex. 40 at 5.) The stock closed at $0.16 per share following this announcement. (Spoonemore Decl. Ex. DD.)

On September 19, 2005, Foamex International and certain of its subsidiaries, including Foamex, filed for bankruptcy. (Form 8-K (Sept. 21, 2005).) According to Foamex International’s press release, under the terms of the agreement in principle that it had reached with certain of its creditors, “there would be no recovery for holders of equity interests in the Company.” (Id. (press release).) The company also announced that it had received notice that its stock would be delisted from Nasdaq on September 28, 2005. (Id.) The stock closed at $0.12 per share following Foamex’s announcement. (Fidelity Facts Ex. 19-1, Deck & Expert Report of M. Freddie Reiss (Oct. 29, 2010) (“Reiss Report”) ¶ 26.) Following the delisting, the stock traded over the counter on the “Pink Sheets.” (Id. ¶ 52.)

In a letter dated September 22, 2005, McGinley directed Fidelity to increase the target cash balance in the Foamex Stock Fund to 20%, ostensibly “to provide liquidity to satisfy daily participant requests.” (Spoonemore Deck Ex. P.) The letter did not specify who was directing Fidelity to increase the cash target, but stated that Fidelity was being directed “[i]n accordance with the Trust Agreement between Foamex International Inc. and Fidelity Management Trust Company,” and that the direction “shall apply until such time as Foamex International Inc. directs [Fidelity] in writing of any deviation to this letter.” (Id.) McGinley testified that Christian made the decision to increase the cash balance (McGinley Dep. at 74:11-75:5), and Christian testified that the decision was made on behalf of Foamex and that he did not recall discussing the matter with any of the other members of the Benefits Committee (Christian Dep. at 65:9-67:1). There is no evidence that the Benefits Committee was involved in the decision to increase the cash balance. (See Ralph Dep. at 26:2-12; Drap Dep. at 18:1— 25.)

That same day, Foamex International released a term sheet describing the principal terms of its proposed plan of reorganization; under the terms of that plan, “[h]olders of equity interests in Foamex International Inc. [would] receive no distributions” and would not “retain any property on account of their equity interests, and such equity interests [would] be cancelled on the effective date of the [reorganization] Plan.” (Fidelity Facts Ex. 49 (press release ¶ 9).)

On September 28, 2005, the closing price of Foamex International common stock was $0.045 per share, and Fidelity informed McGinley that because of the decline in the stock price, in order to keep the percentage of cash in the Foamex Stock Fund at only 20%, Fidelity would have to use cash in the fund to begin buying additional shares of Foamex International stock. (Supplemental Deck of Richard E. Spoonemore in Supp. of Mot. for Class Certification (July 24, 2009) Ex. X.) In a letter dated September 29, 2005, McGinley directed Fidelity to “omit buys” for the Foamex Stock Fund: he instructed that “[s]hould the cash target move above its tolerance level ..., no additional shares of Foamex Stock (FMXIQ) should be purchased.” (Spoonemore Deck Ex. Q.) The letter again did not specify who was directing Fidelity, but stated that Fidelity was being directed “[i]n accordance with the Trust Agreement between Foamex International Inc. and Fidelity Management Trust Company” and that the “direction shall apply until such time as Foamex International Inc. directs [Fidelity] in writing of any deviation to this letter.” (Id.) McGinley testified that Christian made the decision to “omit buys.” (McGinley Dep. at 85:23-86:2).

On December 23, 2005, Foamex International and its bankrupt subsidiaries filed a joint reorganization plan, which provided that all existing shares of Foamex International stock would be canceled without any compensation for shareholders. (Fidelity Facts Ex. 55.) The stock closed at $0.04 per share that day. (Reiss Report ¶ 31.)

Between September 8, 2005, and December 31, 2005, approximately one-fourth of the Fund investment units were transferred out of the Fund by Plan participants. (Foamex Facts ¶ 54.)

On January 4, 2006, representatives of Fidelity held a conference call with Christian and McGinley to discuss the Foamex Stock Fund. During that call, Christian informed Fidelity that he, on behalf of Foamex, had decided to close the fund and to reallocate the fund’s assets to other funds. (Foamex Facts ¶¶ 47-48; Fidelity Facts ¶ 79.) (The Foamex defendants assert that Christian had the authority to make such a decision on behalf of Foamex Csee Foamex Opp’n Br. at 1), and describe him as “the decision-maker for Foamex” (Foamex Facts ¶ 47).) In a subsequent email, Fidelity informed Christian and McGinley that “[t]o begin the liquidation process,” Fidelity would need a letter of direction authorizing the liquidation of the Foamex Stock Fund and that “[ujntil the letter of direction is executed, Fidelity would also accept a letter of direction to raise the cash target in the [fund].” (Spoonemore Deck Ex. NN.) Christian testified that during the conference call, Fidelity recommended that, as an interim step before closure, the cash balance in the fund be increased to 50%. (Christian Dep. at 96:17-97:10.)

In a letter dated January 6, 2006, McGinley directed Fidelity to maintain a target cash balance in the Foamex Stock Fund of 50%, subject to a minimum balance of 49% and a maximum balance of 51%, asserting that “[t]he purpose of this target cash balance is to provide liquidity to satisfy daily participant requests.” (Spoonemore Deck Ex. R.) Christian testified, however, that the purpose of increasing the cash target was to “phase in” the liquidation of the fund. (Christian Dep. at 104:2-7.) McGinley’s letter once again did not specify who was directing Fidelity to increase the cash target, but stated that Fidelity was being directed “[i]n accordance with the Trust Agreement between Foamex International Inc. and Fidelity Management Trust Company,” and that the direction “shall apply until such time as Foamex International Inc. directs [Fidelity] in writing of any deviation to this letter.” (Id.) Christian testified that he made this decision to increase the cash balance and that no one else was involved in the decision. (Christian Dep. at 98:23-99:7.) McGinley similarly testified that, to his knowledge, members of the Benefits Committee were not informed of the decision to increase the cash balance. (McGinley Dep. at 126:18-127:7.) The stock closed at $0.02 per share that day. (Reiss Report ¶ 32.)

On January 20, 2006, McGinley countersigned a letter prepared by Fidelity that authorized Fidelity to begin liquidating the Foamex Stock Fund on January 23. In the letter, Fidelity “ask[ed] that an authorized signatory for the Named Fiduciary and Plan Administrator of the Plan [i.e., the Benefits Committee] review this letter and sign the final page indicating authorization and direction to take the steps outlined in this letter.” The letter stated that “a decision has been made by Foamex L.P. to eliminate the Foamex Stock Fund as an investment option in the Plan” and that “Foamex L.P. agrees to execute an amendment to the Trust Agreement to reflect the elimination of the Foamex Stock Fund as an investment option in the Plan.” McGinley signed the letter, stating that he was “an authorized signatory for the named fiduciary and Plan Administrator of Foamex L.P. 401(k) Savings Plan.” (Spoonemore Decl. Ex. S.) The stock closed at $0.01 per share that day. (Reiss Report ¶ 33.)

In a notice dated January 27, 2006, Plan participants were advised by Fidelity that “[a]s a result of the filing of the proposed [reorganization plan] ..., a decision has been made to liquidate the remaining shares of the Foamex Stock Fund.” The notice explained that “[b]eginnmg on or about January 23, 2006, Foamex [International] shares held in the Foamex stock fund [would] begin to be liquidated” and that it was anticipated that they would “be sold in 10 to 20 business days.” (Fidelity Facts Ex. 63.) Although Foamex did not amend the Trust Agreement, between January 23 and January 30, Fidelity liquidated all the Foamex International stock holdings in the fund. (Foamex Facts ¶ 61; Pl.’s Facts ¶ 74.) The stock price ranged from one cent to two cents per share during that period. (Spoonemore Decl. Ex. DD.)

As a result of delays in the bankruptcy proceeding, however, the automatic cancellation of Foamex International stock was deferred. (Foamex Facts ¶ 62.) And during this time, a shortage in the supply of raw materials for the polyurethane foam industry, caused by the hurricanes in the Gulf of Mexico in August and September 2005, led to a spike in demand for Foamex products and allowed Foamex to raise prices. (Foamex apparently had made a strategic decision before its bankruptcy filing to pre-purchase large quantities of raw materials.) (Christian Dep. at 115:12— 116:6.) In light of this improvement in Foamex’s financial condition, Christian decided that the liquidation of the Foamex Stock Fund should be reversed (id. at 116:18-117:7), and on February 7, 2006, Foamex contacted Fidelity to discuss this possibility (Foamex Facts ¶ 63). In a letter dated February 9, 2006, McGinley advised Fidelity that “[a]cting in its capacity as named fiduciary of the Plan, Foamex has determined that the removal of the Foamex Stock Fund should be delayed until further written direction” and directed Fidelity to repurchase shares of Foamex International stock and to maintain a target cash balance of 50%, subject to a minimum of 40% and a maximum of 60% “to provide liquidity to satisfy daily participant requests.” (Spoonemore Decl. Ex. T at 1.) The letter stated that “Foamex has considered this direction in light of its fiduciary responsibilities under [ERISA]”; that “[a]fter Fidelity, as directed trustee, questioned the directions ..., Foamex further considered the prudence of this direction”; and that “Foamex has discussed the directions ... with its own legal counsel, who has advised that no provision of state or federal securities law or other applicable law prohibits Foamex from providing these directions to Fidelity.” (Id. at 2.) The stock closed at $0.02 per share that day. (Spoonemore Decl. Ex. DD.)

Fidelity informed Plan participants of this repurchase in a notice dated February 24, 2006. Fidelity noted that it had recently been announced that remaining shares in the Foamex Stock Fund would be liquidated and transferred to a money-market fund on or about February 24, 2006, and explained that because of a delay in the company’s bankruptcy proceedings, “the automatic liquidation of remaining shares in the Foamex Stock Fund has been deferred until further notice.” Fidelity informed participants that the fund remained closed to additional contributions or exchanges into the fund but that participants could make exchanges out of the fund at any time. Fidelity further informed participants that Foamex had “directed Fidelity to maintain a target cash balance of 50% in the Fund, subject to a minimum balance of 40% and a maximum of 60%” and that “[t]he Benefits Committee may review this target cash balance in the future and adjust it as appropriate.” (Supplemental Deck of Richard E. Spoonemore in Supp. of Mot. for Class Certification (July 24, 2009) Ex. Q.)

The price of Foamex International stock began to increase in mid-April 2006. (Spoonemore Deck Ex. DD.) On April 27, 2006, Foamex issued a press release asserting that it was “revising its business plan in light of recent favorable developments in Foamex’s business performance.” (Reiss Report ¶ 108 (quoting press release).) The stock closed at $2.37 per share following this announcement; a day later, the stock closed at $3.28 per share. (Spoonemore Deck Ex. DD.) The Foamex Stock Fund did not fully realize the gains attendant to the stock price increases, however, because the fund maintained a 50% target cash balance; while the stock price increased from $0.02 per share on February 9, 2006 (when Foamex directed Fidelity to begin repurchasing stock for the Foamex Stock Fund) to $4.15 per share on December 22, 2006 (when the fund was ultimately closed and fully liquidated), the net asset value of the fund rose from $0.01 per unit to just $0.15 per unit over the same period. (See Spoonemore Deck Ex. II, Expert Report of Dennis E. Logue (Aug. 9, 2010) (“Logue Report”) Ex. 5.)

The Foamex Stock Fund was ultimately closed and was fully liquidated on December 22, 2006. Stanford, 263 F.R.D. at 162.

D. Procedural History

Plaintiff William Stanford, Jr., filed this class-action lawsuit on July 3, 2007, in the Western District of Washington, against the Foamex defendants and Fidelity under section 502(a)(2), 29 U.S.C. § 1132(a)(2), for losses sustained by the Plan as a result of the liquidation of the Foamex Stock Fund in January 2006 and certain adjustments to the fund’s cash target. The case was transferred to this district on September 28, 2007.

After plaintiff filed an amended complaint, defendants filed motions to dismiss, which I denied except as to plaintiffs misrepresentation claim. See Stanford v. Foamex L.P., No. 07-4225, 2008 WL 3874823 (E.D.Pa. Aug. 20, 2008). Stanford amended his complaint twice more, and in his third amended complaint he asserts six counts. Plaintiffs claims are based on the following transactions: (1) the increase in the cash target for the Foamex Stock Fund to 20% on September 22, 2005; (2) the increase in the cash target to 50% on January 6, 2006; (3) the liquidation of the fund, as directed by the letter signed by McGinley on January 20, 2006; and (4) the reestablishment of the 50% cash target on February 9, 2006. In count I, plaintiff claims that the Foamex defendants and Fidelity breached their fiduciary duty, as set forth in section 404(a)(1)(D) of ERISA, 29 U.S.C. § 1104(a)(1)(D), to act in accordance with the documents and instruments governing the Plan. Plaintiff asserts that the Foamex defendants breached their fiduciary duty by adjusting the cash target and by directing that the fund be liquidated in January 2006, even though they lacked the authority to do so. Plaintiff also claims that Fidelity breached its duty by following unauthorized and improper directions from Foamex. In addition to asserting that Foamex is directly liable under count I, plaintiff seeks, in count III, to hold Foamex liable for the breaches of fiduciary duty by the members of the Benefits Committee under the doctrine of respondeat superior. In counts II and V, plaintiff claims that Foamex failed to monitor the Benefits Committee and Fidelity, and thereby breached its duty of prudence under section 404(a)(1)(B) of ERISA, 29 U.S.C. § 1104(a)(1)(B). In count IV, plaintiff claims that Fidelity breached its duty, under section 403(a) of ERISA, 29 U.S.C. § 1103(a), to follow only the “proper directions” of the named fiduciary that are made in accordance with the terms of the Plan and are not contrary to ERISA, by following the unauthorized and improper directions of Foamex to liquidate the Foamex Stock Fund and adjust the cash target. And finally, in count VI, plaintiff seeks to hold each defendant liable for the breaches of fiduciary duty by the other defendants under section 405(a) of ERISA, 29 U.S.C. § 1105(a), which provides for cofiduciary liability.

On September 24, 2009, I granted plaintiffs motion for class certification as to the claims stated in plaintiffs third amended complaint. The class is defined as follows:

All individuals invested in the Foamex Stock Fund on September 22, 2005, except individuals who were members of the Foamex Benefits Committee at any time between September 22, 2005 and December 31, 2006, the members of their immediate families, and their heirs successors or assigns.

Stanford, 263 F.R.D. at 175.

After discovery, Fidelity filed a motion for summary judgment as to all claims against it. Plaintiff filed a cross-motion for partial summary judgment as to the liability of Fidelity under count IV and filed a motion for partial summary judgment as to the liability of Foamex and Christian under counts I and III. The Foamex defendants filed a cross-motion for summary judgment as to all claims against them.

II. STANDARD OF REVIEW

A motion for summary judgment shall be granted “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). “Where the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party, there is no ‘genuine issue for trial.’ ” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986) (quoting First Nat’l Bank of Ariz. v. Cities Serv. Co., 391 U.S. 253, 289, 88 S.Ct. 1575, 20 L.Ed.2d 569 (1968)).

The moving party bears the initial burden of showing that there is no genuine issue of material fact and that it is entitled to relief. See Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). Once the moving party has met its initial burden, the nonmoving party must present “specific facts showing that there is a genuine issue for trial,” Matsushita, 475 U.S. at 587, 106 S.Ct. 1348 (internal quotation marks omitted), offering concrete evidence supporting each essential element of its claim, see Celotex, 477 U.S. at 322-23, 106 S.Ct. 2548. The non-moving party must show more than “[t]he mere existence of a scintilla of evidence” for elements on which it bears the burden of production, Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986), and may not “rely merely upon bare assertions, eonclusory allegations or suspicions,” Fireman’s Ins. Co. v. DuFresne, 676 F.2d 965, 969 (3d Cir.1982). By the same token, “it is inappropriate to grant summary judgment in favor of a moving party who bears the burden of proof at trial unless a reasonable juror would be compelled to find its way on the facts needed to rule in its favor on the law.” El v. SEPTA, 479 F.3d 232, 238 (3d Cir.2007) (footnote omitted). In addition, the mere fact that parties have filed cross-motions for summary judgment “does not mean that the case will necessarily be resolved at the summary judgment stage,” because “[ejach party must still establish that no genuine issue of material fact exists and that it is entitled to judgment as a matter of law.” Atl. Used Auto Parts v. City of Philadelphia, 957 F.Supp. 622, 626 (E.D.Pa.1997).

When evaluating a motion for summary judgment, the court “is not to weigh the evidence or make credibility determinations.” Petruzzi’s IGA Supermarkets, Inc. v. Darling-Delaware Co., 998 F.2d 1224, 1230 (3d Cir.1993). “The evidence of the nonmovant is to be believed, and all justifiable inferences are to be drawn in his favor.” Anderson, 477 U.S. at 255, 106 S.Ct. 2505. “Summary judgment may not be granted ... if there is a disagreement over what inferences can be reasonably drawn from the facts even if the facts are undisputed.” Ideal Dairy Farms, Inc. v. John Labatt, Ltd., 90 F.3d 737, 744 (3d Cir.1996) (internal quotation marks omitted). “[A]n inference based upon a speculation or conjecture,” however, “does not create a material factual dispute sufficient to defeat entry of summary judgment.” Robertson v. Allied Signal, Inc., 914 F.2d 360, 382 n. 12 (3d Cir.1990).

III. DISCUSSION

Section 502(a)(2) of ERISA, 29 U.S.C. § 1132(a)(2), allows plan participants to bring suit against a plan fiduciary for relief under section 409, which imposes personal liability on “[a]ny person who is a fiduciary with respect to a plan who breaches any of the responsibilities, obligations, or duties imposed upon fiduciaries by [ERISA],” and requires such fiduciary “to make good to such plan any losses to the plan resulting from each such breach,” 29 U.S.C. § 1109(a).

A. Count I: Breach of Duty to Follow Plan Documents

In count I, plaintiff alleges that the Foamex defendants and Fidelity violated their duty, as set forth in section 404(a)(1)(D) of ERISA, 29 U.S.C. § 1104(a)(1)(D), to act in accordance with the documents and instruments governing the Plan. Plaintiff claims that the Foamex defendants breached their fiduciary duty by making adjustments to the cash target for the Foamex Stock Fund on September 22, 2005, January 6, 2006, and February 9, 2006, and by directing, on January 20, 2006, that the fund be liquidated, even though they lacked the authority to do so. Plaintiff claims that Fidelity breached its duty by following unauthorized and improper directions from Foamex.

1. The Foamex Defendants

Plaintiff asserts that the Benefits Committee had the exclusive authority to eliminate investment options under the Plan and argues that Christian, acting on behalf of Foamex, “usurped” that authority and therefore acted in contravention of the Plan when he stated that Foamex had decided to eliminate the Foamex Stock Fund and (through McGinley) directed, on January 20, 2006, that the fund be liquidated. In addition, plaintiff challenges, on two separate grounds, the decisions to adjust the cash target for the fund. First, plaintiff argues that Foamex lacked the authority to adjust the cash target. Second, plaintiff asserts that in adjusting the cash target, Christian, acting on behalf of Foamex, was attempting to hedge the risk of the fund, which was not permitted under the Plan, rather than simply attempting to provide liquidity to facilitate participants’ withdrawal requests.

The Foamex defendants have moved for summary judgment as to the claims against them in this count, and plaintiff has moved for partial summary judgment as to the liability of Foamex and Christian. Although, given the undisputed evidence on the record thus far submitted, a reasonable fact-finder could not fail to find that Foamex and Christian breached their fiduciary duty to act in accordance with the Plan, there is a genuine issue of fact as to whether this breach caused the Plan’s losses. Accordingly, I will deny both plaintiffs and the Foamex defendants’ motions for summary judgment as to the claims against Foamex and Christian. But because no reasonable fact-finder could conclude on the basis of the undisputed facts that K. Douglas Ralph, Stephen Drap, or George L. Karpinski breached their fiduciary duty to act in accordance with the Plan, I will grant the Foamex defendants’ motion for summary judgment as to the claims against these three defendants under this count.

a. Were the Challenged Acts Fiduciary Acts?

“In every case charging breach of ERISA fiduciary duty ... the threshold question is not whether the actions of some person employed to provide services under a plan adversely affected a plan beneficiary’s interest, but whether that person was acting as a fiduciary (that is, was performing a fiduciary function) when taking the action subject to complaint.” Pegram v. Herdrich, 580 U.S. 211, 226, 120 S.Ct. 2143, 147 L.Ed.2d 164 (2000).

The Foamex defendants argue that they were not acting as fiduciaries when they adjusted the cash target for the Foamex Stock Fund or when they decided to liquidate the fund. Their argument, however, lacks merit.

ERISA defines fiduciary status in functional terms of control and authority over a plan. See Mertens v. Hewitt Assocs., 508 U.S. 248, 262, 113 S.Ct. 2063, 124 L.Ed.2d 161 (1993). The statute provides that “a person is a fiduciary with respect to a plan to the extent ... he ... exercises any authority or control respecting management or disposition of its assets.” 29 U.S.C. § 1002(21)(A). Fiduciary status “is not an all or nothing concept,” and a court “must ask whether a person is a fiduciary with respect to the particular activity in question.” Srein v. Frankford Trust Co., 323 F.3d 214, 221 (3d Cir.2003) (internal quotation marks omitted).

At issue here are the liquidation of the Foamex Stock Fund and adjustments to the cash target, which affected the percentage of the fund’s assets to be invested in Foamex International stock. These transactions clearly involved the management or disposition of the Plan’s assets and are therefore fiduciary functions.

There is no merit to the Foamex defendants’ argument that the decision to eliminate the Foamex Stock Fund, and the resulting liquidation of the fund in January 2006, was a “settlor” function, not a fiduciary function (see Foamex Opp’n Br. at 10). The Foamex defendants are correct that, as a general matter, “[p]lan sponsors who alter the terms of a plan do not fall into the category of fiduciaries.” Lockheed Corp. v. Spink, 517 U.S. 882, 890, 116 S.Ct. 1783, 135 L.Ed.2d 153 (1996) (explaining that when plan sponsors adopt, modify, or terminate ERISA plans, “they do not act as fiduciaries but are analogous to the settlors of a trust” (citations omitted)). The Supreme Court has reasoned that “an employer’s decision to amend a pension plan concerns the composition or design of the plan itself and does not implicate the employer’s fiduciary duties which consist of such actions as the administration of the plan’s assets.” Hughes Aircraft Co. v. Jacobson, 525 U.S. 432, 444, 119 S.Ct. 755, 142 L.Ed.2d 881 (1999).

Here, of course, neither Foamex nor the Benefits Committee actually amended the Plan when the decision to eliminate and liquidate the Foamex Stock Fund was made in January 2006. Moreover, contrary to the Foamex defendants’ suggestion, even if the Plan had been amended, this general principle does not apply where, as here, a plan amendment affects the investment of existing plan assets. Amending the Plan to prohibit participants from directing new investments or transferring existing investments into the Foamex Stock Fund might arguably be a settlor function; whether to permit a company stock fund in a plan is a matter of plan design within the sponsor’s discretion and not subject to ERISA’s fiduciary obligations. But to the extent that the Foamex defendants decided to liquidate existing investments in the Foamex Stock Fund, the Foamex defendants were acting as fiduciaries. See King v. Nat’l Human Res. Comm., Inc., 218 F.3d 719, 723-24 (7th Cir.2000) (concluding that formation of new 401(k) plan did not implicate fiduciary duties except to the extent that it involved decision about investment of funds transferred from old plan to new plan); cf. Department of Labor (“DOL”) Information Letter to John N. Erlenborn (Mar. 13, 1986) (asserting that the decision to terminate a plan is a settlor activity and as such is not subject to ERISA’s fiduciary-duty requirements, but emphasizing that “activities undertaken to implement the termination decision are generally fiduciary in nature”).

Nor is there any merit to the Foamex defendants’ argument that the adjustments to the cash target on September 22, 2005, January 6, 2006, and February 9, 2006, were “ministerial” in nature because they “naturally flowed” from the Benefits Committee’s July 13, 2005, decision to close the Foamex Stock Fund to new investments. (Foamex Opp’n Br. at 7.) Citing a DOL interpretive bulletin published at 29 C.F.R. § 2509.75-8, the Foamex defendants characterize the adjustments to the cash target as “ministerial,” suggesting that they are similar to the non-fiduciary functions described in the DOL interpretation. But, as the Third Circuit has noted, see Bd. of Trs. of Bricklayers & Allied Craftsmen v. Wettlin Assocs., Inc., 237 F.3d 270, 274 (3d Cir.2001), the DOL’s interpretation addresses administrative functions involved in the administration of benefits under a plan and does not speak to activities related to the management or disposition of plan assets.

Moreover, contrary to the Foamex defendants’ contention, the adjustments to the cash target cannot be said to have “naturally flowed” from the Benefits Committee’s July 13, 2005, decision to close the fund to new investments; nothing in that decision required that the cash target be increased, let alone that it be increased to 20% two months later, on September 22, 2005, and then to 50% on January 6, 2006, and reestablished at 50% on February 9, 2006, after the liquidation of the fund. Indeed, Foamex and Fidelity have argued that it was Foamex’s bankruptcy filing and the delisting of the stock — events that had not occurred when the Benefits Committee made its decision to close the fund to new investments — that precipitated the decision to increase the cash target to 20%. {See, e.g., Mem. of Foamex Defs. in Supp. of Summ. J. Mot. (“Foamex Br.”) at 9 (“As a result of the delisting and bankruptcy filing, Fidelity anticipated an increased selling of stock and recommended increasing the cash component to 20% to provide liquidity to satisfy daily participant requests).” (internal quotation marks omitted); Reiss Report ¶¶ 45-47.) And it was not until after Foamex International announced, on December 23, 2005, that there would be no recovery to shareholders under the reorganization plan that Christian, on behalf of Foamex, decided to increase the cash target to 50%.

The Foamex defendants’ argument is further undermined by their suggestion (see Foamex Br. at 12) that the increase in the cash target to 50% on January 6, 2006, was a step in implementing Christian’s decision (made on behalf of Foamex and formally communicated to Fidelity in a letter signed by McGinley on January 20, 2006, stating that Foamex had decided to eliminate the fund as an investment option and directing Fidelity to begin liquidating it) — a decision that they concede was not a “ministerial implementation” of the Benefits Committee’s decision on July 13, 2005, to close the fund to new investments (see Foamex Opp’n Br. at 7), since the Benefits Committee expressly decided that participants who had already invested in the fund could continue to maintain their investments in the fund if they so chose.

I thus conclude as a matter of law that the challenged transactions — the increase in the cash target for the Foamex Stock Fund to 20% on September 22, 2005, the increase in the cash target to 50% on January 6, 2006, the liquidation of the fund, as directed on January 20, 2006, and the reestablishment of the 50% cash target on February 9, 2006 — were fiduciary acts,

b. Did the Foamex Defendants Breach Their Fiduciary Duty?

Having established that the challenged transactions were fiduciary acts, I turn now to the question whether the Foamex defendants breached their fiduciary duties to the Plan.

i Liquidation of the Fund

Plaintiff asserts that the Benefits Committee had the exclusive authority to eliminate investment options under the Plan and argues that Christian, acting on behalf of Foamex, “usurped” that authority and therefore acted in contravention of the Plan when he decided to liquidate the Foamex Stock Fund in January 2006 in connection with eliminating the fund as an investment option.

The Foamex defendants do not dispute that Christian was acting on behalf of Foamex or that he had the authority to do so. {See, e.g., Foamex Opp’n Br. at 1 (“Foamex entrusted Christian with ample authority to make the decisions in question.”).) But they do dispute plaintiffs claim that Foamex lacked the authority to eliminate the fund as an investment option. They claim that Foamex had the authority, under section 13.2 of the Plan, to amend the Plan at any time, and assert that Foamex thus had the authority to eliminate any investment options offered under the Plan.

Unfortunately for the Foamex defendants, however, Foamex did not amend the Plan in connection with the liquidation of the fund in January 2006, a fact that should not be taken lightly. Cf. Curtiss-Wright Corp. v. Schoonejongen, 514 U.S. 73, 82, 115 S.Ct. 1223, 131 L.Ed.2d 94 (1995) (asserting that plan amendments are “fairly serious events” and deserve “special consideration”). And under the terms of the Plan as it then existed, only the Benefits Committee had the express authority to alter the investment options available to Plan participants. {See Plan § 4.4.) The Foamex defendants cite no basis for their authority to liquidate the fund or eliminate the fund as an investment option other than the unexercised power to amend the Plan.

The Foamex defendants are essentially arguing that the authority to amend the Plan gave Foamex the authority to take actions not expressly authorized under the terms of the Plan. Their argument proves too much. Indeed, if accepted, their argument would render meaningless the requirement in section 404(a)(1)(D) that a fiduciary discharge his duties in accordance with the plan documents — at least to the extent that the fiduciary had the authority to amend the plan.

A fact-finder thus could not reasonably find on the basis of the evidence submitted that Foamex had the authority to eliminate the Foamex Stock Fund as an investment option and liquidate the fund when it had not amended the Plan.

ii. Adjustments to the Cash Target

Plaintiff also challenges, on two separate grounds, the adjustments to the cash target. First, plaintiff argues that Foamex lacked the authority to adjust the cash target. Second, plaintiff asserts that the Foamex Stock Fund is permitted to hold cash only to the extent necessary to facilitate transfers and exchanges. Plaintiff asserts that there is no evidence that Christian considered the fund’s liquidity needs when he set the cash targets and argues that Christian instead was impermissibly attempting to hedge the risk of the fund.

Plaintiff first asserts that the Benefits Committee, as the named fiduciary, had the exclusive authority to set the cash target, and argues that Christian, acting on behalf of Foamex, “usurped” that authority and therefore acted in contravention of the Plan when he directed that Fidelity adjust the target cash balance. Plaintiff points to section 4(e) of the Trust Agreement, which provides that “[t]he Named Fiduciary shall, after consultation with the Trustee, establish and communicate to the Trustee in writing a target percentage and drift allowance for such short-term liquid investments.” (Trust Agreement § 4(e).) Plaintiff notes that the original Trust Agreement, in a separate provision that seemingly conflicted with section 4(e), authorized Foamex, as the Plan sponsor, to set the target cash percentage. As originally adopted, Schedule H provided: “[I]n order to satisfy daily participant requests for exchanges, loans and withdrawals, the Stock Fund will also hold cash or other short-term liquid investments in an amount that has been agreed to in wilting by the Sponsor and the Trustee.” (Trust Agreement Sched. H (before 2001 amendment) (emphasis added).) But, as plaintiff further notes, this language in Schedule H was removed as part of a 2001 amendment to the Trust Agreement.

The Foamex defendants argue in response that both the Benefits Committee and Foamex had the authority to adjust the cash balance. Although they argue that there is no evidence that the purpose of the amendment to Schedule H was to eliminate Foamex’s authority to set the cash target, they do not try to argue that the elimination of such authority was merely a scrivener’s error or that the amendment inadvertently eliminated Foamex’s authority. Rather, the Foamex defendants argue that other changes adopted as part of the same 2001 amendment make it clear that Foamex retained the authority to set the cash target.

The Foamex defendants point, for example, to section 4(e)(i), titled “Acquisition Limit,” which required Foamex, as Plan sponsor, to inform Fidelity of any acquisition limits with respect to Foamex International stock under the Plan or under applicable law:

Pursuant to the Plan, the Trust may be invested in Sponsor Stock to the extent necessary to comply with investment directions in accordance with this Agreement. The Sponsor shall be responsible for providing specific direction on any acquisition limits required by the Plan or applicable law.

(Trust Agreement § 4(e)(i).) ERISA prohibits a plan from acquiring employer securities if, as a result, the value of employer securities held by the plan would exceed 10% of the plan’s assets. See 29 U.S.C. § 1107(a)(2). ERISA exempts eligible individual account plans such as the Foamex Plan from this acquisition limit, see id. § 1107(b), but to the extent that ERISA was amended and such an acquisition limit did apply to the Plan, or to the extent that the Plan itself contained such a limitation (it did not at the time of the events in question), section 4(e)(i) would have required Foamex to so inform Fidelity. But this provision said nothing about the cash target for the fund, which was meant to provide liquidity to satisfy participants’ exchange or withdrawal requests.

The Foamex defendants also point to section 4(e)(iii), titled “Purchases and Sales of Sponsor Stock,” which outlined how Fidelity was to purchase and sell shares of Foamex International stock for the Foamex Stock Fund:

Unless otherwise directed by the Sponsor in writing pursuant to directions that the Trustee can administratively implement, the following provisions shall govern purchases and sales of Sponsor Stock.

(Trust Agreement § 4(e)(iii).) This subsection, for example, provided that “[p]urchases and sales of Sponsor Stock shall be made on the open market in accordance with the Trustee’s standard trading guidelines” {id. § 4(e)(iii)(A)), and directed Fidelity to use Fidelity Capital Markets to provide brokerage services for such open-market transactions {id. § 4(e)(iii)(C)). It also provided that “[i]f directed by the Sponsor in writing prior to the trading date, the Trustee may purchase or sell Sponsor Stock from or to the Sponsor if the purchase or sale is for adequate consideration ... and no commission is charged.” {Id. § 4(e)(iii)(B).) But again, this provision said nothing about the cash target.

Finally, the Foamex defendants point to section 4(e)(iv), titled “Execution of Purchases and Sales of Units,” which outlined procedures for handling purchases and sales of units in the Foamex Stock Fund:

Unless otherwise directed in writing pursuant to directions that the Trustee can administratively implement, purchases and sales of units shall be made as follows[.]

(Trust Agreement § 4(e)(iv).) It provided, for example, that purchases and sales of units were to be made on the date on which Fidelity received the transaction request. {Id. § 4(e)(iv)(A).) It further provided that aggregate sales of units on any given day would be limited to the fund’s available liquidity for that day {id. § 4(e)(iv)(B)), and that Fidelity would “close the Stock Fund to sales or purchases of units, as applicable, on any date on which trading in the Sponsor Stock has been suspended or substantial purchase or sale orders are outstanding and cannot be executed” (id. § 4(e)(iv)(C)). Although this provision referred to the fund’s liquidity — the amount of cash available in the fund — it said nothing about who had the authority to adjust the fund’s cash target. Moreover, unlike the other two provisions cited by the Foamex defendants, this provision did not grant Foamex any authority not granted in some other provision of the Trust: it provided that “[u]nless otherwise directed in writing,” Fidelity was to follow certain procedures and guidelines, but it did not specify who could “otherwise direct ]” Fidelity.

Given that section 4(e) expressly provides that the “Named Fiduciary shall ... establish and communicate to the Trustee in writing” the target cash percentage, these other three provisions cannot reasonably be interpreted to mean that Foamex had the authority to set the cash target. The fact that Foamex was granted authority with respect to certain aspects of the administration of the Foamex Stock Fund does not mean that it had authority with respect to all aspects of the fund.

The Foamex defendants argue that even if Foamex lacked the authority to adjust the cash target, McGinley was acting with the authority of the Benefits Committee when he signed the letters of direction instructing Fidelity to adjust the target cash percentage. This argument too lacks merit.

It is true that McGinley was the secretary of the Benefits Committee and was authorized to sign letters of direction on the committee’s behalf. But as plaintiff asserts, there is no evidence that the Benefits Committee made the decisions to adjust the cash balance in the Foamex Stock Fund. Rather, the evidence demonstrates that Christian, acting on behalf of Foamex, made these decisions. McGinley testified that it was Christian who made the decision to increase the cash target to 20% on September 22, 2005, and, after the fund was liquidated, to repurchase shares of Foamex International stock and reestablish the cash target at 50% on February 9, 2006. (McGinley Dep. at 73:1-75:5, 152:2-16.) Christian similarly testified that he did not recall discussing the decision to increase the cash target to 20% with other members of the Benefits Committee and that the decision was made on behalf of Foamex. (Christian Dep. at 65:23-67:1.) He further testified that he made the January 6, 2006, decision to increase the cash balance to 50% and the February 9, 2006, decision, after the fund had been liquidated, to repurchase Foamex International stock and reestablish a cash target of 50%, and that the Benefits Committee was not involved in making those decisions. (Id. at 98:23-99:7, 114:14-19, 116:18-118:1.) And Christian did not have the authority to act unilaterally on behalf of the Benefits Committee, because the Plan provided that decisions of the Committee had to be approved “by the majority of the members then in office” at any meeting of the committee or “by unanimous vote in writing” if a meeting was not held. (Plan § 12.2.)

Nor is there any evidence, contrary to the Foamex defendants’ suggestion, that the Benefits Committee delegated its authority with respect to the Foamex Stock Fund to either Foamex (or Christian, on behalf of Foamex) or McGinley. (See Plan § 12.3.6 (granting the Benefits Committee the power “to appoint other fiduciaries to carry out various specific fiduciary responsibilities”).)

The undisputed evidence submitted so far thus shows that Foamex lacked the authority to adjust the cash target.

Separately, plaintiff argues that, regardless of whether Foamex had the authority to adjust the cash target, the adjustments were made for an impermissible purpose under the Plan. Specifically, plaintiff asserts that the Foamex Stock Fund is permitted to hold cash only to the extent necessary to facilitate transfers and exchanges. Plaintiff asserts that there is no evidence that Christian considered the fund’s liquidity needs when he set the cash targets and argues that Christian instead was impermissibly attempting to hedge the risk of the fund. Although the fact that Foamex lacked the authority to adjust the cash target is sufficient to establish a breach of fiduciary duty on the part of Foamex and Christian, I will address this second argument.

As a preliminary matter, I note that Fidelity and Foamex characterize the January 6, 2006, decision to increase the cash target to 50% as a step in liquidating the Foamex Stock Fund (see Foamex Br. at 12; Fidelity Reply Mem. in Supp. of Mot. for Summ. J. (“Fidelity Reply Br.”) at 8), and they thus distinguish that decision from the September 22, 2005, decision to increase the cash target to 20%. The January 6, 2006, letter from McGinley, however (like the September 22, 2005, letter) states that “[t]he purpose of [the 50%] target cash balance is to provide liquidity to satisfy daily participant requests.” (Spoonemore Decl. Ex. R.) In any event, plaintiff also asserts that “[t]he purpose of the increase in cash [to 50%] was to begin or phase in the liquidation process.” (Ph’s Facts ¶ 48.)

It is clear from the Plan documents that the cash component of the Foamex Stock Fund was not intended as an alternative investment or as a hedge against Foamex International stock but was instead meant only to satisfy participants’ exchange and withdrawal requests (Trust Agreement § 4(e)). Nonetheless, where a decision to liquidate the fund has been properly made in accordance with the Plan documents, it is unreasonable to read section 4(e) of the Trust Agreement as prohibiting an increase in the cash target as a first step in liquidating the fund. As one of Fidelity’s experts explained, in such a situation, increasing the cash target “allows the gradual liquidation of the employer stock in the plan, while still permitting plan participants to transfer out of the stock fund if they wish to do so.” (Hennessy Report ¶ 15.) (Of course here, the decision to liquidate the fund was not properly made, because Foamex lacked the authority to make such a decision.) Thus, to the extent that the purpose of increasing the cash target to 50% on January 6, 2006, was, as Christian testified, to “phase in” the liquidation of the fund (Christian Dep. at 104:2-7), if the decision to liquidate the fund had been properly made, a fact-finder could not reasonably find that this adjustment was contrary to the terms of the Plan.

But, although the Foamex defendants similarly try to characterize t