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Release Date: November 29, 2006
Release Number: 06-2011-BOS/BOS 2006-338
Contact Name: John M. Chavez
Phone Number: 617.565.2075
Providence, Rhode Island - The U.S. Department
of Labor has obtained a court order appointing two independent
fiduciaries to manage the abandoned pension plan originally sponsored by
Providence, Rhode Island-based Arnold Kilberg & Company (AK&C)
and owner Arnold Kilberg.
According to James Benages, regional director for the
Labor Department’s Employee Benefits Security Administration (EBSA) in
Boston, Kilberg and AK&C sponsored the Northeast Capital Corp. Money
Purchase Pension Plan & Trust for the benefit of their employees.
Kilberg filed for personal bankruptcy in March 2004 and his accounting
firm went out of business about a month later without ensuring the
appointment of a fiduciary to oversee distribution of the plan’s
assets to participants. As of March 31, 2001, the plan had 11
participants and beneficiaries who were owed $89,566.58.
The department’s lawsuit, filed earlier this year
in U.S. District Court for the District of Rhode Island, sought the
appointment of an independent fiduciary to administer the plan. On
November 13, the court entered an order appointing Joseph M. DiOrio,
Esq., the trustee of Arnold Kilberg’s personal bankruptcy proceedings,
and Ronald Carmark, the purchaser of the assets of AK&C, to be the
plan’s fiduciaries.
Another corporation owned and operated by Arnold
Kilberg, Moneta Capital Corp., was placed into receivership on or about
March 21, 2000 at the request of the Small Business Administration.
Because of prior plan loan arrangements, the receiver of Moneta has come
into possession of approximately $76,000 (plus earnings) belonging to
the plan. The court order requires the independent fiduciaries to obtain
plan money being held by the receiver, place the funds in a trust
account in the name of the plan, and then distribute the plan assets (up
to a total of $89,566.58) to the eligible plan participants and
beneficiaries. Arnold Kilberg, who is also a plan participant, will not
share in this distribution.
The Labor Department will now seek a court order to
facilitate the transfer of the plan funds from the Moneta receiver to
the trust account set up by independent fiduciary DiOrio. With DiOrio’s
assistance, Ronald Carmark will then handle the proper distribution of
the plan assets to the participants and beneficiaries.
“Our legal action demonstrates that the department
is committed to doing everything in its power to protect the retirement
benefits promised to workers who participate in plans such as this, even
when they are abandoned by their trustees,” said Benages.
The judgment resulted from an investigation by EBSA’s
Boston regional office. Employers and workers in Rhode Island can
contact that office at 617.565.9600 or EBSA’s toll-free number,
1.866.444.EBSA (3272), for help with any problems relating to
private-sector pension and health plans.
(Chao v Kilberg)
Civil Action Number: 06-75 ML/DLM
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