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Release Date: 05/24/2004
Release Number: 04-945-CHI
Contact Name: Rita D. Ford
Phone Number: 202.693.8671
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Chicago, Illinois - The U.S. Department of Labor
has obtained a default judgment requiring the trustee of the Belgium,
Wisconsin-based Belgium Foundry Acquisition Company Inc. 401(k) plans to
restore $60,434 in delinquent employee contributions with interest to the
union and non-union plans. |
Under
the judgment, James C. Medinger is permanently barred from serving as a
plan fiduciary and must undo any transactions prohibited by the Employee
Retirement Income Security Act (ERISA). The judgment also requires the
appointment of an independent fiduciary to distribute the assets to
participants and terminate the plans. Medinger is the trustee and owner of
Belgium Foundry. |
The
judgment, entered in the federal district court in Milwaukee, Wisconsin,
resulted from a lawsuit filed by the department in October 2003. The suit
alleged that Medinger failed to forward employee contributions to the
plans from January 2000 to January 2003, retaining the funds in the
company’s general assets. |
The
department also filed an adversary complaint with the U.S. Bankruptcy
Court in Milwaukee, Wisconsin, to prevent Medinger from discharging the
debt he owes to the plans. In March 2004, the Bankruptcy Court issued an
order stating that the debt Medinger owes to the plans cannot be
discharged in bankruptcy. Medinger filed for Chapter 7 bankruptcy in April
2003. |
“The department will take all necessary steps to
ensure that plan fiduciaries responsibly manage the 401(k) plans entrusted
to them,” said Kenneth Bazar, director of the Chicago regional office of
the Employee Benefits Security Administration (EBSA), which investigated
the case. |
Belgium
Foundry manufactured castings for agricultural and electronic equipment.
The non-union plan had seven participants and $272,802 in assets as of
December 2001. The union plan had 33 active participants and $762,543 in
assets, according to the latest information available to the Labor
Department. |
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 make workers whole but allows them to avoid EBSA enforcement
actions and civil penalties as well as applicable excise taxes. For more
information about the VFCP see www.dol.gov.ebsa. |
In
fiscal year 2003, EBSA achieved record monetary results of $1.4 billion
related to the pension, 401(k), health and other benefits of millions of
American workers and their families. Employers and workers can reach
EBSA’s Chicago regional office at 312.352.0900 or through EBSA’s toll
free number, 1.866.444.EBSA (3272), for help with problems relating to
private-sector retirement and health plans. |
(Chao
v. Medinger)
Civil Action No. 2003-2525 |
U.S.
Labor Department news releases are accessible on the Internet at
www.dol.gov. The information in this news release will be made available
in alternate format upon request (large print, Braille, audio tape or
disc) from the COAST office. Please specify which news release when
placing your request at 202.693.7765 or TTY 202.693.7755. The U.S.
Department of Labor is committed to providing America's employers and
employees with easy access to understandable information on how to comply
with its laws and regulations. For more information, please visit
www.dol.gov/compliance. |