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The U.S. Labor Department today filed a lawsuit
against a bankrupt Nashville, Tenn.- based firm, its affiliate and 401(k) plan
official for failing to forward employee contributions to the plan.
Defendants are Exterior Systems Unlimited,
Inc.(ESU), its wholly-owned subsidiary P&E Electric Co., Inc., and Michael
F. Perkerson. Perkerson has served as chief executive officer and chairman of
the board of both companies as well as the plan’s trustee and an officer
of another wholly-owned subsidiary, whose employees participated in the
plan.
According to the lawsuit, there were 169
participants in the plan and assets totaling $1,507,571 as of June 30, 1998.
The lawsuit alleges that employee contributions
withheld from P&E and ESU payrolls from October 1996 to July 1997 were not
forwarded to the plan, but instead were used to finance corporate operations of
ESU and the subsidiaries. The firms’ bankruptcy trustee John H. Bailey,
III, who was appointed in 1997, asserts that the unremitted employee
contributions totaled $156,918.99.
The Labor Department is seeking to have the
defendants ESU, P&E and Perkerson restore all losses to the plan with
interest. In addition, the department asks to have Perkerson permanently barred
from serving as a fiduciary or having control over the assets of any employee
benefit plan subject to the Employee Retirement Income Security Act, and that
his individual plan account offset any losses and be reallocated to remaining
participants in the plan.
The lawsuit is the result of an investigation
conducted by the Atlanta Regional Office of the department’s Pension and
Welfare Benefits Administration into alleged violations of federal pension law.
It was filed in federal district court in Nashville.
(Herman v. Exterior Systems Unlimited, et al)
Civil Action # 3:99-785 |
