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Release Date: 05/11/1999
Release
Number: V-92 Issued by Chicago Office of Information
Contact Name:
Sharon Morrissey
Phone Number: 202.219.8921 |
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The U.S. Department of Labor filed a adversary complaint asking
the bankruptcy court in Milwaukee not to discharge any debt the former
president of the bankrupt Louis Allis Co., Daniel E. Stetler, III, may have for
any liability arising from his alleged violations of Title I of the Employee
Retirement Income Security Act, in an effort to begin recouping monies owed to
participants of the company-sponsored 401(k) plans. |
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The department’s complaint against Stetler of Greendale,
Wis., a 41% owner of the common stock of Louis Allis Co. and a member of its
board of directors, concerns his own Chapter 7 bankruptcy filing of Jan. 19,
1999. Today’s Labor Department action is a prelude to filing a civil
complaint against Stetler and the company’s plans in federal district
court in the Eastern District of Wisconsin, requesting relief under ERISA, to
regain approximately $176,000 in losses to the plans. The amount includes
employee contributions deducted from paychecks but not forwarded to the
company’s two 401(k) retirement plans. |
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According to the department’s civil complaint, when the
company filed its own Chapter 7 bankruptcy petition on Oct. 20, 1998, Louis
Allis Co. did not appoint a trustee or plan administrator to replace itself
with the plans and even now no individual or entity has been appointed to
operate the plan. Thus, the department’s civil lawsuit requests that the
court:
- appoint an independent fiduciary to manage and, ultimately,
liquidate the pension plans;
- set off Stetler’s own individual account in the non-union
employee 401(k) plan to pay the lost monies to participants of that plan, and
- permanently bar him from exercising any fiduciary authority
over any ERISA employee benefit plans.
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Louis Allis Co. established its union and non-union employee
401(k) plans in 1994 and, during the period of June 28 to Oct. 4, 1998, the
company allegedly withheld voluntary employee contributions to the plans and
failed to remit them to the plans’ investment accounts. During the period
of June 28 to Sept. 25, 1998, the complaint alleges that Stetler had
discretionary authority or control to determine when or whether these employee
contributions were withheld, forwarded to the plan or commingled with the
company’s assets. |
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The department alleges Stetler exercised this control, thus making
him responsible for the plans’ losses. According to the plans’ 1997
annual reports, there were 180 participants and assets of $3,060,707 in the
401(k) plan for union employees, and 146 participants with assets of $4,892,249
in the non-union plan. Louis Allis Co., a maker of large electric motors and
generators, is in the process of having its company assets sold to pay its
debts. |
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The legal actions pertaining to the company’s pension plans
resulted from an investigation conducted by the Chicago Regional Office of the
department’s Pension and Welfare Benefits Administration into alleged
violations of the federal pension law. |
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(Herman v. Daniel E. Stetler III, debtor )
Adversary Complaint
in Bankruptcy Court
Civil Action No. 99-2192 |
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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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