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Archived News Release — Caution: Information may be out of date.
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Release Date: 12/27/2001
Release Number: III-01-12-27-148-NEP
Contact Name: Sharon Morrissey
Phone Number: 202.693.8664
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Philadelphia, Pennsylvania - The U.S. Department
of Labor has sued a Meshoppen, Pennsylvania trucking company, Penn's Best,
Inc. and corporate executives for allegedly overpaying for stock purchased
from the company's president to establish an employee stock ownership plan
(ESOP). |
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The suit, filed December 21 in federal district court
in Scranton, Pennsylvania names as defendants Penn's Best, its president
and sole ESOP trustee Meredith W. Ruark, and comptroller and plan
committee member Mark J. Stanley. |
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The suit alleges that the defendants caused the plan to
pay an inflated price for stock it purchased from Ruark in 1994 to
establish the ESOP. On August 22, 1994, the plan entered into a stock
purchase agreement to buy 30 percent of the outstanding common stock, or
196,000 shares, from Ruark. The plan paid $4,103,373 or $20.94 per share.
The department contends that this was far more than the plan should have
paid if the stock were properly valued. |
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The department also is seeking a court order to remove
the defendants from their positions with the plan, to permanently bar them
from serving any employee benefit plan governed by the Employee Retirement
Security Income Act (ERISA) and to appoint an independent fiduciary to
administer the plan. |
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Penn's Best created the pension plan in 1993 for its
employees. At the end of 1997, the ESOP had total assets of approximately
$3,245,607 and 284 participants. |
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The investigation leading to the civil lawsuit was
conducted by the Philadelphia Regional Office of the department’s
Pension and Welfare Benefits Administration into alleged violations of
federal pension law. |
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(Chao v. Meredith W. Ruark et al
Civil Action No. 3-CV01-2433) |
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U.S. Department of Labor
news releases are accessible on the Internet. The information in this news
release will be made available in alternate format upon request (large
print, Braille, audio tape or disc) from the Central Office for Assistive
Services and Technology. Please specify which news release when placing
your request. Call 202.693.7773 or TTY 202.693.7775. |
Archived News Release — Caution: Information may be out of date.
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