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Release Date: 07/10/2003
Release Number: 308
Contact Name: Gloria Della
Phone Number: 202.693.8664
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Chicago, Illinois - The U.S. Department of Labor
sued the fiduciaries of the 401(k) and medical plans of Gen Fire, Inc. of
Northbrook, Illinois on July 2 for failure to deposit with the plans
contributions deducted from employees’ paychecks. The assets were
retained with those of the company. |
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“The hard-working employees of Gen Fire set these
funds aside so they’d have a secure retirement, but their company’s
executives violated that trust and did not deposit the funds in their
retirement accounts,” said Secretary of Labor Elaine L. Chao. “This
department will not tolerate this kind of corporate abuse and
mismanagement, and our case sends a clear message the federal government
will aggressively enforce the law to protect workers’ benefits.” |
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The suit alleges that fiduciaries Richard Huthsing and
C. Keet Huthsing, the vice president and president of the company,
respectively, violated the Employee Retirement Income Security Act by
failing to forward employee contributions to the 401(k) plan, to forward
employee health premiums to the medical plan carrier, and to obtain a
fidelity bond covering the assets of the 401(k) plan as required by law. |
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The suit alleges that the defendants failed to collect
delinquent contributions owed to the plans at various times starting in
April 14, 2000, to September 29, 2000. The department’s suit seeks to
require the defendants to reimburse the plans for all losses with
interest, undo any transactions with the plans that are prohibited under
the law, appoint an independent fiduciary to manage the plans, and
permanently bar the defendants from serving as fiduciaries to any plans
governed by ERISA. |
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Gen Fire was a manufacturer of fire extinguishers and
fire protection materials, and filed for protection under Chapter 11 of
the bankruptcy code on October 5, 2000. On January 22, 2001, the case was
converted to a Chapter 7 bankruptcy. The company sponsored the 401(k) and
medical plans for as many as 120 employees. Cumulatively, the plans had
$125,000 in assets as of September 30, 2000. |
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Kenneth Bazar, director of the department’s Chicago
office of the Employee Benefits Security Administration (EBSA);, noted
that employers with similar problems, who are not yet the subject of an
investigation by EBSA, may be eligible to participate in the department’s
Voluntary Fiduciary Correction Program (VFCP). Participation in the VFCP
requires employers to make workers whole but allows them to avoid EBSA
enforcement actions and civil penalties as well as any applicable excise
taxes. For more information about the VFCP, see www.dol.gov/ebsa. |
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Employers and workers can reach EBSA’s Chicago
Regional Office at 3l2.353.0900 or through its toll-free number,
1.866.444.EBSA (3272) for help with problems relating to private-section
pension and health plans. |
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(Chao v. Huthsing)
Civil Action No. 03C-4617 |
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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. |
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