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Release Date: 04/10/2002
Release Number: USDL 02-61
Contact Name: Sharon Morrissey
Phone Number: 202.693.8664
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Ft. Lauderdale, Florida – The
U.S. Department of Labor has settled its lawsuit against the Ft.
Lauderdale-based, court-appointed Chapter 11 bankruptcy trustee of Atlantis
Diagnostic Center, Inc. The trustee John P. Barbee will make restitution
to the company’s profit sharing plan of $8,645.53, including lost opportunity
costs.
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The department filed a lawsuit against
Barbee on December 20, 2001, alleging that he improperly transferred to the
bankruptcy estate certain funds he knew were assets of the profit sharing plan.
Barbee allegedly committed this act against the request of the Labor Department.
He neither confirmed nor denied the allegations.
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On November 2, 1995, the former trustee of
the plan was convicted of embezzling from the retirement fund. On April
19, 1995, Atlantis Diagnostic Center filed voluntary Chapter 11 bankruptcy and
Barbee was appointed September 29, 1995 to take over the company’s bankruptcy
estate. Just 19 days after he received notice from the department of the
existence of a plan account and of his potential fiduciary duties under the
Employee Retirement Income Security Act (ERISA), Barbee withdrew the funds
liquidating the plan account. This money was ultimately deposited in the
bankruptcy estate and disbursed to creditors instead of being returned to the
plan.
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The department contended in its
lawsuit that Barbee was never a named fiduciary of the plan but could be
considered, however, a default fiduciary of the plan assets he removed.
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The plan had $140,000 in assets as of
December 30, 2001.
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The court action resulted from an
ongoing investigation by the department’s Miami District Office of the Pension
and Welfare Benefits Administration, which has oversight of ERISA. The
settlement agreement and consent order were entered on April 5 in the federal
district court in Ft. Lauderdale.
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(Chao v. John P. Barbee
Civil Action No. 01-7916
Case No. 95-21452-BCK-RVR U.S. Bankruptcy Court)
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U.S. Department of Labor
news releases are accessible on the Internet. The information in this news
release will be made available in alternate format upon request (large
print, Braille, audio tape or disc) from the Central Office for Assistive
Services and Technology. Please specify which news release when placing
your request. Call 202.693.7773 or TTY 202.693.7775.
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