Stillwater, Minn-based ProDisk, Inc. was ordered
to pay $97,500 in civil penalties by an administrative law judge for failure to
file annual reports for the 401(k) plan of the predecessor company Syncom
Technologies.
The U. S. Department of Labors Pension and
Welfare Benefits Administration (PWBA) contended that ProDisk was liable for
the penalties because it was the successor administrator of the plan after the
liquidation of Syncom Technologies. PWBA assessed the penalties against ProDisk
for failure to file annual reports for 1994 through 1996.
The administrative law judge upheld the penalty by
finding ProDisk was indeed the successor plan administrator of the pension
plan. According to the judges ruling, there was sufficient evidence that
ProDisk maintained continuity of operations of Syncom Technologies.
ProDisk also was found to have known of the pension plans existence at
the time ProDisk purchased all Syncom Technologies outstanding shares in
January 1995.
Syncom Technologies filed for Chapter 11
bankruptcy and subsequently converted to Chapter 7 liquidation in December
1995.
Our action in this case protects
participants and beneficiaries by ensuring that they are able to receive
pension distributions and make inquiries about their benefits," said Alan D.
Lebowitz, Deputy Assistant Secretary for PWBA.
Department of Labor v. Syncom Technologies
Case No. 1998-RIS-28 |