Lawsuit filed against PACT chairman and 10 corporations

Lawsuit filed against PACT chairman and 10 corporations

All Prepaid Affordable College Tuition participants were notified in late February that funds they contributed had lost 50% of their value.

Two of those participants have filed an official compliant.

Since the late 80s, the PACT Program has helped thousands of Alabama parents send their kids to college.

These two people are filing suit on behalf of everyone who's in jeopardy of losing out on a precious investment.

Thursday, the 14-page lawsuit was filed in Calhoun County Circuit Court by Allen Hudson and Nina McGinnis.

The first defendant listed is Kay Ivey, chairman of the board of PACT, followed by 10 foreign corporations registered to do business in the state of Alabama.

Callan Associates is the first foreign corporation named.

It is the primary adviser which directs decision pertaining to investments, which are made by nine individual investment firms.

The suit claims negligence, wantonness (an enhanced degree of negligence), and breach of contract stating defendants failed in managing, investing, and providing sound financial advisement decisions regarding PACT funds.

It further states the plaintiffs, seeking class action status, and their beneficiaries' have been damaged to the extent that their goal of receiving a college education for a family member has been adversly affacted and/or eliminated.

Huntsville attorney Trey Riley tells WAFF 48 News, "It's a natural class action type proposition in that there's a large number of people involved with similar actions or claims."

Riley wasn't surprised to hear about the civil action.

"There's an awful lot of people who have depended on promises made and they have a situation now where their plans for their children going to school have been thrown into a state of disarray."

Riley is one of them.

Years ago he purchased a PACT contract for his son.

He says, "My cost at that point was $5,541."

Late last year, both plaintiffs paid more than $20,000 for their PACT contract.

Depending on what happens in the next months and years, Riley suspects more legal action could be forthcoming.

Plaintiffs are seeking certifying the class status and compensatory damages and attorney fees to each class member for breach of contract.

Click here to view the lawsuit: