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Media Release

Archived Media Release - Caution: Information may be Out of Date

Release Date: March 29, 1999
Release Number: USDL-PWBA-99-37-3-29 Dallas
Contact Name: Diana Petterson or Beverly Sepulveda
(214) 767-4776, ext. 222 or 221
Sharon Morrissey
(202) 219-8921

OWNERS OF HOUSTON COMPANY SUED OVER MISUSE OF PROFIT SHARING PLAN ASSETS

Superior Engine Rebuilding Co. of Houston and its owners have been sued by the U.S. Department of Labor for withdrawing more than $344,000 from the company’s profit sharing plan for use by themselves and to pay creditors of the company.

The Superior Engine Rebuilding Co. was formed in Houston to rebuild motor vehicular engines. The company’s profit sharing plan covered as many as 29 participants and had assets of $880,367 as of Jan. 31, 1992.

Named as defendants in the department’s lawsuit are the company as well as Linda K. Williams and David C. Zingelmann and the estate of their mother Gladys Zingelmann. These defendants were trustees of the plan and directors of the company.

According to the lawsuit, the defendants violated the Employee Retirement Income Security Act (ERISA) when they:

  • caused certain withdrawals, transfers, and/or loans to be made from the plan in the amount not less than $344,189 to certain parties in interest to the plan from March 19, 1993, to date and which remain outstanding;

  • failed to pay distributions to terminated participants and beneficiaries of the plan since March 19, 1993;

  • failed to defray the reasonable expenses of administering the plan and caused the plan to incur unnecessary service charges;

  • failed to maintain adequate plan records; and

  • failed to obtain bonding for persons handling plan property as required by federal law.

The lawsuit seeks a court order to require the defendants to restore any losses, including interest, suffered by the plan’s participants and beneficiaries and to undo any prohibited transactions involving the plan. The lawsuit also asks the court to require that the trustees offset any of their individual account balances to repay the amounts owed to the plan.

In addition, the department’s lawsuit seeks to remove Linda Williams and David Zingelmann as trustees of the plan, to permanently bar them from serving as fiduciaries to the plan or any other employee benefit plan covered by ERISA and finally to appoint an independent successor trustee to manage the plan.

The lawsuit, filed on March 18 in federal district court in Houston, resulted from an investigation conducted by the Dallas Regional Office of the Labor Department’s Pension and Welfare Benefits Administration into alleged violations of ERISA.

 

 

 

 

(Herman v. Superior Engine)
Civil Action No. 8-99-0808

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 Media Release - Caution: Information may be Out of Date

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