The U. S. Department of Labor has obtained a
consent order whereby trustees of the John E. Healy & Sons Pension Plan of
New Castle, Del. restore $413,927 to the plan through forfeiture of their right
to benefits under the plan.
Benefits forfeited by trustees James V. and
Michael J. Healy -- defendants in a lawsuit filed in Nov. 10, 1999 by the
Department for violations of Employee Retirement Income Secuirty Act (ERISA) --
will be reallocated to the accounts of plan participants other than themselves.
The court order also removed the defendants from their position as fiduciaries
with the plan and appointed Alan N. Kanter & Associates of Baltimore,
Maryland to be the independent fiduciary to manage and operate the plan.
Our goal is to protect the hard-earned
benefits of workers and their families against misuse," said Mabel L.
Capolongo, regional director of the Philadelphia Regional Office of the Labor
Departments Pension and Welfare Benefits Administration. Employers
and workers can reach us at 215-861-5300 for help with any problems relating to
private-sector pension and health plans.
According to the lawsuit, James V. Healy was
alleged to have loaned plan money to his financially troubled companies during
1994 and 1996. The loans were unsecured and made without any promissory notes
or specified repayment terms. Michael J. Healy was charged with allowing these
loans to be made and failure to reverse them once he became aware that the
loans had been made.
The Department alleges that the loans were never
fully repaid, thereby causing losses to the plan as a result of the
below-market interest rates applied by the Healys in determining the amounts
owed by the companies on the plan loans.
The pension plan is sponsored by Healy Management
Services, Inc, a subsidiary of the Healy Group, Inc. The Healy Group, Inc. and
its subsidiaries, which also includes John E. Healy & Sons, Inc., provide
construction management services primarily in the Delaware area.
As of October 1997, the plan covered approximately
29 current and former employees of Healy Management Services, Inc. and John E.
Healy & Sons. At that time, the plan had just over $1 million in benefit
obligations and approximately $296,000 in net assets available to pay
benefits.
The consent order was entered on Aug. 17 in
federal district court in Wilmington, Del. This lawsuit resulted from an
investigation conducted by PWBAs Philadelphia Regional Office into
alleged violations of ERISA.
(Herman v. Healy) Civil Action No.
99-V-774 |