Former directors of Lehman Brothers Holdings Inc won the dismissal of a lawsuit seeking to hold them liable for losses suffered by the fallen investment bank's employee retirement plan program.

U.S. District Court Judge Lewis Kaplan ruled on Wednesday that the plaintiffs -- participants of a Lehman retirement plan -- had not sufficiently alleged that the defendants breached their fiduciary duties leading up to the bank's historic bankruptcy in 2008.

The plaintiffs had argued that defendants, which also included committee members of the retirement plan, knew about Lehman's deteriorating financial condition but still kept the plan invested in Lehman stock.

After the near collapse of Bear Stearns, the defendants knew or should have known that Lehman faced a dire situation and took steps to protect the plan, according to the plaintiffs.

But Kaplan wrote that the plaintiffs' allegations were entirely conclusory and lacked anything specific.

Bear Stearns's failure, coupled with the known risks about mortgaged lending, no doubt was a cause for concern at Lehman and the other firms, he wrote. But cause for concern is not a dire situation.

Mark Rifkin, an attorney for the plaintiffs, said in a statement he was disappointed with the ruling.

We believe the decision overlooked the facts and misapplied the law, he said. We are in the process of preparing an appeal.

The case is In re: Lehman Brothers Securities and ERISA Litigation, U.S. District Court, Southern District of New York, No. 09-02017.

(Reporting by Andrew Longstreth; Editing by Muralikumar Anantharaman)