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Release Date: 04/17/2002
Release Number: BOS 2002-080
Contact Name: Gloria Della
Phone Number: 202.693.8666
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Boston, Massachusetts - The U. S. Department of Labor today announced a
consent order appointing State Street Bank and Trust to serve as the independent
fiduciary to oversee investment by six retirement plans in the common stock of
their sponsor, Crucible Materials Corp. in Syracuse, New York.
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“The Labor Department is committed to protect the
benefits and plan assets designed to pay employees those benefits,” said James
Benages, director of the Boston Regional Office of the department’s Pension
and Welfare Benefits Administration.
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Under the order, State Street has authority
to continue to hold or sell the stock back to Crucible
Materials Corp. under a put option. All costs of exercising
the put option are to be paid by the company. The order also
permits the sale of stock to the company at fair market value
based on the valuation of a qualified, independent appraiser.
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In an amended lawsuit filed simultaneously with the order,
the Labor Department sued Crucible Materials Corp. and the plans’ retirement
committee for improperly converting corporate stock held by the plans to common
stock in order to re-capitalize the company.
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The department alleged that the common stock acquired in
the conversions between 1994 to 1996 was not qualifying employer security under
the Employee Retirement Income Security Act (ERISA) because at least 50% of the
aggregate amount of the stock of the same class was not held by persons
independent of the issuer after the conversion. The suit also alleges that
the defendants allowed the plan violations to continue and failed to correct the
improper conversion to common stock.
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The plans cover as many as 3,039 participants and have
cumulative assets of $142,842,756 as of December 31, 1999. Crucible Materials
Corp. manufactures and distributes pipes and tubing, specialty steel products
and other metal products. The company suffered financial difficulties
prior to 1994 and restructured its capital after it was unable to pay dividends
on preferred stock holdings.
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This consent judgment, entered in federal district court in
Syracuse, resulted from an investigation conducted by the Boston Regional Office
of the department’s Pension and Welfare Benefits Administration.
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Employers and workers can reach the regional office at
617.565.9600 or through the new Toll-Free Employee &
Employer Hotline number, 1.866.275.7922, for help with
any problems relating to private-sector pension and health plans.
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(Chao v. Crucible Materials Corp.
Civil Action No. 00-CV-2054)
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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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