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Release Date: September 25, 2006
Release Number: 06-1325-CHI
Contact Name: Brad Mitchell
Phone Number: 312.353.6976
Duluth, Minnesota - The U.S. Department of
Labor has sued the president of Arrowhead Equipment Company, Duluth,
Minnesota, for failing to administer and terminate the company’s
employee stock ownership plan so that assets could be distributed to
plan participants.
The suit names Gunnar Viljaste and the Arrowhead
Equipment Company as fiduciaries of the Employee Stock Ownership Plan
(ESOP). The company provided tires and parts for trucks, as well as an
automotive service and rest stop. It ceased operating in June 2005.
“The department is committed to act quickly to help
workers get their benefits when plan assets are misused or their plans
are abandoned,” said Steven Eischen, regional director of the Kansas
City office of the Employee Benefits Security Administration (EBSA),
which investigated the case.
The suit alleges that Viljaste failed to terminate
the plan and distribute assets to participants and beneficiaries after
the company ceased operations. The defendants, as fiduciaries of the
ESOP, allegedly failed to diversify investments of certain plan
participants, to allocate stock to participants and to follow the plan
document. The ESOP covers 43 participants, with total assets of
$123,267.
The suit seeks to order Arrowhead Equipment Company
and Viljaste to correct the transactions prohibited by law and to
permanently bar them from serving in a fiduciary capacity to any
employee benefit plan covered by ERISA. The department also asks the
court to appoint an independent fiduciary to administer the plan and
distribute the assets.
Employers and workers can reach EBSA’s Kansas City
regional office at 816.426.5131. Help with problems relating to
private-sector retirement and health plans can also be obtained by
calling EBSA’s toll-free number, 1.866.444.EBSA (3272). In fiscal year
2005, EBSA achieved monetary results of $1.7 billion related to pension,
401(k), health and other benefits for millions of American workers and
their families.
(Chao v. Arrowhead Equipment Company)
Civil Action No. CV-06-3813
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