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Release Date: 031/11/1998
Release Number:
USDL-59
Contact Name:GLORIA DELLA
Phone Number:
202.219.8921 |
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The U. S. Department of Labor has obtained a
settlement with Sherwood Shutter Corp. of Santa Ana, and its owner, Michael L.
Thibodeau, to repay over $220,000 plus interest owed to the company’s
profit sharing plan. |
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The profit sharing plan, created in 1986, covers
178 participants and had $320,748 in assets as of April 30, 1995. Thibodeau
serves as a plan trustee and the company is administrator of the plan. |
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Beginning in 1989, Sherwood Shutter began
suffering financial troubles which resulted in the company filing for
bankruptcy reorganization under Chapter 11 in 1995. During the period of these
financial difficulties, Thibodeau attempted but failed to obtain bank financing
to keep the company operating. |
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The Labor Department’s lawsuit, filed
simultaneously with the settlement, alleged that in 1991 Thibodeau made four
transfers totaling $300,000 from the plan’s account to Sherwood Shutter to
operate the business. He made $89,048.67 in repayments that year and
subsequently executed a note for the balance. Only two interest payments were
made to the plan prior to the company’s 1995 bankruptcy filing. |
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Thibodeau allegedly failed to timely collect the
money owed by Sherwood Shutter to the profit sharing plan, failed to
appropriately investigate the merits of making such investments for the plan,
and failed to obtain security for the loans and to provide terms of repayment
for the loans. Sherwood Shutter was charged with failing to monitor
Thibodeau’s actions. |
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Under the terms of the settlement and consent
order, the defendants agreed to repay within two years all money owed to the
plan, less any amount owed to Thibodeau’s plan account. Thibodeau also
agreed to step down as an official of the plan, to waive his pension benefit
until the plan is fully compensated and to be permanently barred from serving
as a fiduciary to any plan governed by the Employee Retirement Income Security
Act (ERISA). A new administrator will be appointed to manage the plan. |
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The lawsuit and settlement agreement were
simultaneously filed on Feb. 19, 1998 in federal district court in Santa Ana,
California. The settlement was entered on Feb. 25. This case resulted from an
investigation conducted by the Los Angeles Regional Office of the
department’s Pension and Welfare Benefits Administration into alleged
violations of ERISA. |
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(Herman v. Thibodeau)
Civil Action No. SA CV
98-141 GLT (EEx) |
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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 202.693.7755. |
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