PASCAGOULA -- One group of lawyers is expected to propose a settlement in Chancery Court this week in the case of Singing River Health System retirees and the county hospital system's failed pension plan.
It involves millions in tax dollars and millions for attorneys.
The agreement circulating over the weekend proposes to establish a panel of four people to oversee hospital operations, paid for by the hospital.
It sets up a payment schedule to fund the pension plan. The hospital would pay $142.8 million over the next four decades, Jackson County would pay $13.6 million over the next seven years and it appears that the attorneys for 13 clients would get $6.45 million by the end of September 2018.
Those are Coast attorneys Jim Reeves and Matthew Mestayer and Cal Mayo with Mayo and Mallette in Oxford. Reeves is the lead attorney in the federal case in U.S. District Court.
So far, there is no class established by the federal court, even though the failing pension affects 600 people. Each of the retirees has individual circumstances. There are many retirees who aren't in any suit.
The agreement offers that if U.S. District court denies class certification or doesn't approve the settlement, it would still become final as long as the Chancery Court approves it.
An attorney for roughly 150 retirees in Chancery Court, Earl Denham, strongly disagrees with the proposed settlement.
He said that based on the math, he does not believe the settlement supplies enough money to adequately protect all the retirees for life.
The settlement proposal defines a class as current and former employees in the retirement system who participated in the Retirement Plan and Trust, including individual defendants.
According to the proposal, SRHS and Reeves would reach an agreement on who is in the class using hospital records.
It states that Jackson County would make the payments whether SRHS does or not, and if SRHS defaults, the court would issue a judgment against the hospital system for the unpaid balance.
If federal court requires an opt-out class, Jackson County and SRHS can terminate settlement if a certain percentage request exclusion.
All costs will be born by Jackson County and the hospital system, and nothing in the settlement is an admission of liability.
The Sun Herald could not reach Reeves for comment.
Denham said his clients are not part of this proposed settlement.
The attorneys who constructed it "didn't consult me," he said, when contacted Sunday. He said he sees this agreement as Reeves and Mayo striking a deal with the hospital. "The only people guaranteed to get money out of this in the long run, when the money has run out for the plan, are the attorneys."
He said it's the first case he's seen where a group of lawyers are trying to "establish a case in settlement, before they have a class."
He also said that if the court takes this route, "none of the people who did this will be punished, because they will remain in place," referring to county hospital management and legal advisers.
"Everybody gets out of it," Denham said. He also said that the agreement allows for the termination of the pension plan.
The pension fund is sorely underfunded because the hospital did not pay into it for years, so it lost direct money and interest, he said. Paying back that money will not make the pension whole, he said.
"This doesn't even propose to do that," he said.
In it, the county only pays long enough to get the current Board of Supervisors out of office, and it doesn't guarantee SRHS's payments, he said.
He said he believes it offers no long-term protection to retirees and he doubts the settlement is legal.