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Release Date: 05/12/2005
Release Number: 05-710-SEA (#05-59)
Contact Name: Michael Shimizu
Phone Number: 206.553.7620
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Portland, Oregon - The U.S. Department of Labor
has filed an adversary complaint in federal bankruptcy court in Portland,
Oregon, to protect more than $18,600 owed to the 401(k) retirement plan of
the defunct local company Redi-Fab Inc. |
The complaint seeks to prevent Paul E. Davis, former
owner of the company, from discharging in bankruptcy proceedings his debt
of $18,624 in employee contributions and lost interest owed to the plan.
Davis, who also was a fiduciary of the company’s 401(k) plan, allegedly
violated the Employee Retirement Income Security Act by failing to forward
contributions and interest to the plan during 2002 and 2003. He also
commingled the funds with the company’s general assets and used the
money to satisfy general corporate obligations. |
“Those responsible for employee benefit plans cannot
misuse their employee’s funds or have their personal debts forgiven at
the expense of the employees,” said Francis C. Clisham, regional
director of the Labor Department’s Employee Benefits Security
Administration (EBSA) in San Francisco. |
Clisham said while the company deposited some funds
into plan accounts, a substantial amount of money was never deposited.
Redi-Fab, which entered Chapter 7 bankruptcy January 19, manufactured
pre-fabricated industrial buildings. There were approximately 30
participants in the plan at the time of the company’s bankruptcy. |
Employers with similar problems, who are not yet the
subject of an investigation by EBSA, may be eligible to participate in the
department's Voluntary Fiduciary Correction Program (VFCP). Participation
in the VFCP requires employers to correct ERISA violations but allows them
to avoid EBSA enforcement actions, civil penalties and any applicable
excise taxes. For more information, visit EBSA’s Web site at www.dol.gov/ebsa. |
The
case was investigated by EBSA’s Seattle district office. In fiscal year
2004, EBSA achieved record monetary results of $3.1 billion related to the
pension, 401(k), health and other benefits of millions of American workers
and their families. Employers and workers with questions or concerns
regarding their private-sector pension and health plans can contact the
EBSA District Office in Seattle at 206.553.4244 or EBSA’s toll free
number, 1.866.444.EBSA (3272). Information is also available from the
agency’s Web site. |
(Chao
v. Davis)
Adversary No. 05-30450
(Bankruptcy Court) |
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with its laws and regulations. For more information, please visit the
Department's Compliance
Assistance page. |