The U. S. Department of Labor has obtained a final
settlement permanently barring the owners of G&L Resorts, Inc. in Ormond
Beach, Fla. from serving any employee benefit plan governed by the Employee
Retirement Income Security Act.
The court settlement, entered on June 13 in
federal district court in Orlando, also appointed Larry Lefoldt of Lefoldt and
Co. in Jackson, Miss. as the independent fiduciary with authority to manage the
pension plans assets, to orderly terminate the plan by Aug. 31 and to
distribute the assets to eligible plan participants.
In order to make the innocent plan participants
whole, defendants Gilbert and Linda Ward also waived their rights to benefits
under the plan and must make additional contributions to fund the plans
terminations if there are insufficient assets to do so.
The settlement supersedes an interim settlement
obtained May 12, 1999. A lawsuit filed simultaneously with the interim
settlement alleged that the Wards failed to terminate the pension plan or
distribute its assets after deciding in 1991 to terminate the plan. As a
result, the department contends that benefits continued to accrue from 1991 to
the present.
Instead of distributing benefits under the plan,
the Wards also were alleged to have withdrawn $111,223 from the plans
trust account in 1993 to pay a balloon mortgage on the resort property. After
the Labor Department informed them of the impropriety of the transaction, the
loan was repaid with interest. However, the department alleged the interest did
not fully compensate the plan for losses.
G&L Resorts created a defined benefit plan,
which covered approximately 25 participants and had $354,039 in assets as of
Oct. 30, 1997. The company, which sold its assets on Aug. 1, 1998, provided a
camper resort for tourists and permanent residence for many retirees.
This case resulted from an investigation conducted
by the Miami District Office of the departments Pension and Welfare
Benefits Administration (PWBA) into alleged violations of ERISA. Our goal
is to assure that consumers know that the department is only a phone call away
to help protect the benefits promised by employers, said Jesse Day,
director of the Miami District Office. Employers and workers can reach us
at 954/424-4022 for help with any problems relating to private-sector pension
and health plans.
(Herman v. G&L Resorts, Inc.) Civil Action
#99-521-CIV-ORL-18 |