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Release Date: 06/12/2003
Release Number: III-03-06-12-076-SP
Contact Name: Sharon Morrissey
Phone Number: 202.693.8664
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Philadelphia, Pennsylvania - The U.S. Department
of Labor obtained a consent order on June 4, 2003, appointing an
independent fiduciary to manage the company’s employee stock ownership
plan (ESOP). The order also required Meshoppen, Pennsylvania-based Penn’s
Best, Inc. and its corporate executives to restore to the plan $485,000
plus issue to the plan 200,000 newly-issued shares of Penn’s Best common
stock. |
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“Our action sends a clear message that the department
will aggressively enforce the law to ensure that plans are not paying
unreasonable amounts for investments,” said Secretary of Labor Elaine L.
Chao. “This settlement recovers retirement assets that unlawfully
enriched plan fiduciaries at the expense of the workers.” |
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Besides the restitution, the court order required
company president Meredith W. Ruark to resign his position as sole trustee
of the ESOP and permanently barred him from serving any employee benefit
plan governed by the Employee Retirement Income Security Act (ERISA). Mark
J. Stanley, comptroller and plan committee member, is removed as a plan
committee member and barred from serving in any capacity to an ERISA plan
for three years. |
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After issuing the stock, the plan will hold 46.48% of
the company’s outstanding and issued common stock. Officials agreed not
to issue additional stock or use any other measures to dilute the plan’s
percentage of ownership. |
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The department sued the defendants on December 21, 2001
in federal district court in Scranton, Pennsylvania for purchasing from
Ruark 196,000 shares of stock in 1994 at an allegedly inflated price. The
lawsuit alleged that the stock was not properly valued and the plan paid
more than the stock was worth. |
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Penn’s Best, a trucking company, created the pension
plan in 1993. As of December 31, 2000, the ESOP had 343 participants and
assets of $2,479,675. |
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The case was investigated by the department’s
Philadelphia regional office of the Employee Benefits Security
Administration (EBSA). Employers and workers who have questions or
concerns regarding their private-sector pension and health plans can
contact the EBSA regional office for help at 215.861.5300 or EBSA’s toll
free number, 1.866.444.EBSA (3272). |
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(Chao v. Ruark)
Civil Action No. CV01-2433 |
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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. |
