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Release Date: May 12, 1999
Release
Number: USDL: 99 - 88
Contact Name: Sharon Morrissey
Phone
Number: (202) 219-8921 |
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The U.S. Department of Labor and owners of G & L Resorts, Inc.
in Ormond Beach, Fla.. agreed to an interim settlement removing them from their
positions with the plan as partial resolution of a lawsuit alleging they
misused pension plan assets to pay company expenses. |
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Defendants Gilbert and Linda Ward were removed from their plan
positions and permanently barred from serving any other employee benefit plan
governed by federal pension law in an order signed by U.S. District Judge Sharp
today. The court also appointed Paul J. McTague of Naples, Fla., as an
independent fiduciary to manage the plan, to conduct an orderly termination of
the plan and to distribute its assets. |
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The defined benefit plan, established in 1988, had approximately
25 participants and $354,039 in assets as of Oct. 30, 1997. The company is a
private corporation engaged in providing a camper resort for tourists and a
permanent residence for many retirees. |
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Under the settlement, McTague is authorized to hire an enrolled
actuary to prepare benefit calculations. These calculations will be used to
determine the final terms of the settlement, including any additional
restitution to the plan. |
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The department’s complaint, filed simultaneously with the
interim settlement, alleges that in 1991, the Wards decided to terminate the
plan and communicated their decision to participants. Despite this intention
and announcement, the plan was never terminated nor were its assets
distributed. The accrual of benefits to the present will significantly increase
the participants’ account balances. |
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The lawsuit also alleges the Wards withdrew $111,223 from the
plan’s trust account in 1993 to pay a balloon mortgage on the resort
property. Once the impropriety of the transaction was pointed out by the Labor
Department, the Wards paid the loan principal, plus 2.27 percent interest, but
the department alleged that amount of interest did not fully compensate the
plan for losses sustained during the time the misappropriated funds were used
by the Wards and their company. |
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The settlement is a result of an investigation carried out by the
department’s Atlanta Regional Office of the Pension and Welfare Benefits
Administration, which administers the fiduciary standards of the Employee
Retirement Income Security Act (ERISA). It was entered in the federal district
court in Orlando. |
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(Herman v. G & L Resorts, Inc. et al)
Civil Action #
99-521-CIV-ORL-18 |
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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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