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Release Date: Wednesday, April 7, 1999
Release Number: USDL: 99-48
Contact Name: Sharon Morrissey
Phone Number: (202) 219-8921 |
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A Federal District Court in Miami, Fla. has appointed an
independent trustee to manage and terminate the 401(k) plan of Hollywood,
Fla.-based Carolina Fitness Equipment, Inc. under a settlement agreement
obtained by the U. S. Department of Labor. |
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Under the settlement, the court appointed M. Larry Lefoldt of
Lefoldt & Co., located in Jackson, Miss., as the independent manager of the
plan with authority to terminate and distribute assets of the 401(k) plan.
Harvey Miller and Edwin B. Beam Jr. also were removed from their positions as
trustees of the plan. |
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Carolina Fitness, a North Carolina corporation, was a retailer of
exercise equipment. Carolina Fitness was sold in February 1994 to Bio-Dyne
North Corporation of Atlanta, which relocated the company’s operations to
Florida. The company ceased operating Aug. 23, 1996. |
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The company sponsored the 401(k) plan for 58 participants. The
plan, which has not been formally terminated, had assets of $361,929 as of
Sept. 30, 1998. According to the lawsuit, no employer or employee contributions
have been made to the plan since July 1996. |
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The Labor Department’s lawsuit, filed on Dec. 3, 1998,
alleged that Miller and Beam terminated employment with the company in July
1996 but did not resign formally as trustees of the plan or notify the
plan’s third-party administrator or group annuity contractor of their
resignation as plan officials. Carolina Fitness also allegedly failed to
appoint replacement trustees for Miller and Beam or successor fiduciaries to
manage and operate the plan. Participants allegedly were unable to direct their
investments among the different options available under the plan and the
company and trustees failed to respond to participant inquiries. |
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The settlement and consent judgment resulted from an investigation
conducted by the Atlanta Regional Office of the department’s Pension and
Welfare Benefits Administration into alleged violations of the Employee
Retirement Income Security Act. The consent judgment was entered on April 5 in
the federal district court in Miami. |
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(Herman v. Carolina Fitness Equipment, Inc.)
Civil Action No.
98-7367-CIV-GOLD |
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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 202.693.7775. |
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