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Release Date: October 30, 2006
Release Number: 06-1875-BOS/BOS 2006-310
Contact Name: John M. Chavez
Phone Number: 617.565.2075
Seeks to Recover Employees’ Funds from Estate of Bankrupt
Massachusetts Trucking Company
Springfield, Massachusetts - The U.S.
Department of Labor has petitioned the federal bankruptcy court in
Springfield to release 401(k) plan contributions withheld from the
paychecks of employees of bankrupt N&B Express Inc. from the
company’s bankruptcy estate.
N&B Express Inc. was an interstate trucking
company in South Deerfield, Massachusetts, that filed for protection of
the bankruptcy court on September 2, 2005. The company had sponsored and
administered two 401(k) plans for its employees: the N&B Express
Inc. Savings and Retirement Plan and the N&B Express Inc. Non-Union
401(k) Profit Sharing Plan.
The plans allowed employees who participated in these
employee benefit plans to elect to have contributions withheld from
their wages by N&B. Under the Employee Retirement Income Security
Act (ERISA) enforced by the U.S. Labor Department, such contributions
are fully vested and become assets of the plans. The suit alleges that,
from May 2005 through June 2005, employees’ contributions were not
segregated from the company’s general assets and were not transferred
to the plans. The total withheld from employee pay for contribution to
the savings plan during the period was $16,044, and the amount withheld
for the profit sharing plan was $10,627.
The department’s complaint asks the court to order
N&B to return the employee contributions to the plans since the
money belongs to the plans and their participants and beneficiaries, and
not the company. Also named in the Labor Department’s lawsuit is the
Bank of Western Massachusetts, which has security interests and liens on
most or all of N&B’s assets.
ERISA, which is administered by the Labor
Department’s Employee Benefits Security Administration (EBSA), is the
federal law that protects private sector pension and employee benefit
plans.
In fiscal year 2005, EBSA achieved monetary results
of $1.7 billion related to the pension, 401(k), health and other
benefits for millions of American workers and their families. Employers
and workers can contact EBSA’s Boston regional office at 617.565.9600
or toll free number at 1.866.444.EBSA (3272) for help with problems
relating to private-sector retirement and health plans.
(Chao v. N&B Express, Inc., Chapter 11 Case No.
05-46064-HJB)
Adversary Proceeding No. 06-04287
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with its laws and regulations. For more information, please visit the
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