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Release Date: 04/29/1998
Release Number:
USDL-96
Contact Name:GLORIA DELLA
Phone Number:
202.219.8921 |
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The owner of a real estate investment firm, Bainbridge
Investments, Inc., formerly located in Orange County, Calif., was sued by the
U. S. Department of Labor for improperly operating the company’s profit
sharing plan. The plan was financially illiquid and resulted in its inability
to pay benefits owed to participants. |
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Elden W. Bainbridge, the owner of the company and a trustee of the
plan, now resides in Englewood, Colo. Bainbridge Investment bought, managed,
built and sold commercial and industrial real estate primarily in California.
The profit sharing plan covered 24 participants and had $470,111 in assets as
of April 1995. |
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The Labor Department alleges that Bainbridge caused the plan to be
financially illiquid because of a series of plan investments in real estate and
loans made to participants and unrelated third parties. According to the
lawsuit, Bainbridge:
made participant loans totaling $96,000 without executing
proper loan documents or obtaining security for the loans;
made two loans totaling $125,000 to the owners of a
veterinary clinic whereby the clinic was used as the collateral for both loans.
Proceeds from these loans were passed from the borrower, through an
intermediary, to Bainbridge; and
failed to foreclose on the clinic as required under the
loan documents and reconveyed the deed of trust on the veterinary clinic back
to the owners. |
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The lawsuit seeks a court order requiring that Bainbridge restore
all losses resulting from the series of improper plan loans and correct any
transactions prohibited by the Employee Retirement Income Security Act (ERISA).
The lawsuit also seeks the appointment of an independent trustee to manage the
plan, payment of all costs of the trustee by Bainbridge, and the permanent bar
of Bainbridge from serving in a position of trust to any plan governed by
ERISA. |
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The lawsuit was filed on April 29 in federal district court in
Denver. The case resulted from an investigation conducted by the Kansas City
Regional Office of the Labor Department’s Pension and Welfare Benefits
Administration into potential violations of ERISA. |
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(Herman v. Bainbridge)
Civil Action No.
98-N-947 |
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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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