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Release Date: April 14, 2009
Release Number: 09-125-BOS/BOS 2009-101
Contact Name: John M. Chavez
Phone Number: 617.565.2075
Boston – Robert Kjellman, former owner of
bankrupt Massachusetts children’s furniture store chain BB Kids LLC,
has agreed to restore $14,212 to the company’s savings incentive match
plan for employees individual retirement account (SIMPLE IRA) to settle
a lawsuit filed by the U.S. Department of Labor alleging violations of
the Employee Retirement Income Security Act (ERISA).
The suit, filed in the U.S. District Court for the
District of Massachusetts, alleged that Kjellman failed to make sure
that employee contributions withheld from employee paychecks between
January 1, 2005, and February 16, 2006, were properly forwarded to the
plan. On the latter date, BB Kids LLC filed for bankruptcy.
The company was the sponsor and administrator of the
SIMPLE IRA plan established through AIM Investment Services Inc. of
Houston, Texas, on January 1, 2005, to provide retirement benefits to
employees of BB Kids LLC. Kjellman had sole discretionary control over
the funds withheld from the salaries of plan participants. The Labor
Department’s Employee Benefits Security Administration’s (EBSA)
Boston Regional Office, which investigated the case, enforces ERISA
requirements to protect private sector employee benefit plans.
“These employees counted on this money to pay their
future retirement benefits,” said Jean Ackerman, EBSA’s regional
director in Boston. “The defendant in this case violated his fiduciary
duty by failing to ensure that funds withheld from employee paychecks
were properly forwarded to the plan.”
A consent judgment obtained by the department orders
Kjellman to pay restitution to the plan and to distribute to
participants their shares of any restitution. He also will be barred
from serving as a trustee or administrator with respect to any ERISA-covered
plan for a period of five years.
Workers and employers can contact EBSA’s Boston
Regional Office at 617.565.9600 or toll-free at 866.444.3272 for help
with problems relating to private sector pension and health plans. In
fiscal year 2008, EBSA achieved monetary results of $1.2 billion related
to pension, 401(k), health and other benefits for millions of American
workers and their families. Additional information can be found at
www.dol.gov/ebsa.
Secretary of Labor v. Robert Kjellman
Civil Action Number: 1:09-CV-10133
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