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For Immediate Release: July 25, 2013
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Release Number: 13-1163-CHI
Judge orders fiduciaries, plan sponsor to restore more than $150,000 to
Cougar Package Designers Profit Sharing Plan in Lemont, Ill.
CHICAGO – Under terms of a consent order and judgment, $150,226 must be restored to the Profit Sharing Plan of the now defunct Cougar Package Designers Inc., the U.S. Department of Labor announced today. The judgment follows an investigation by the department’s Employee Benefits Security Administration that found plan assets were improperly transferred and commingled with the Lemont-based company’s operating funds between Jan. 1, 2009 and Sept. 30, 2010, in violation of the Employee Retirement Income Security Act.
“People entrusted with workers’ retirement plans must be held accountable when they fail to uphold that trust,” said Jeff Monhart, acting director of EBSA’s Chicago Regional Office, which conducted the investigation. “We at the department are committed to helping workers obtain their rightful benefits when plan fiduciaries violate the law.”
Cougar Package Designers provided protective packaging until it was dissolved in August 2010, following a lawsuit brought by MB Financial Bank. Through its owners, Cougar Packaging Solutions Inc. bought part of the assets of Cougar Package Designers and continued the operations of the company but did not adopt the retirement plan. Because the plan was not adopted, its governing documents required that it be terminated.
The complaint names Mark A. Cottone, president of Cougar Package Designers, and John Senese, president of Cougar Packaging Solutions. The complaint alleged that, instead of terminating the plan, Cottone informed participants on Sept. 10, 2010, that he needed all of the plan’s remaining assets to resolve the MB Financial Bank suit and to make possible the reorganization of Cougar Package Designers as Cougar Packaging Solutions. The complaint further alleged that the assets were used for company operations as well as to pay creditors and fund the formation of Cougar Packaging Solutions Inc., a successor company. As of Dec. 31, 2010, the latest date for which information is available, the plan had less than $900 in liquid assets.
As part of the judgment, Cottone and Senese will each forfeit any claim they have to assets of the Cougar Package Designers Inc. Profit Sharing Plan. Cottone has been removed as the fiduciary to the Cougar Package Designers Inc. Profit Sharing Plan, and both Cottone and Senese are permanently enjoined from serving as a fiduciary or service provider to any ERISA-covered plan in the future. The court appointed Lefoldt & Co. P.A. to serve as the independent fiduciary to administer and terminate the plan and forward assets to qualified participants.
The Labor Department’s regional solicitor in Chicago litigated this case in the U.S. District Court for the Northern District of Illinois in Chicago.
Workers participating in employer-sponsored health and retirement benefit plans who feel that they have been denied a benefit inappropriately or have questions about benefits laws can contact an EBSA benefits adviser by visiting www.askebsa.dol.gov or calling 866-444-EBSA (3272).
Seth D. Harris, Acting Secretary of Labor v. Mark A. Cottone; Cougar Package Designers Inc.; Cougar Packaging Solutions Inc., successor to Cougar Package Designers Inc.; Cougar Package Designers Inc. Profit Sharing Plan
Civil Action Number 1:13-cv-05078
U.S. Department of Labor news materials are accessible at www.dol.gov. The information above is available in large print, Braille, audio tape or disc from the COAST office upon request by calling 202-693-7828 or TTY 202-693-7755.