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Release Date: 12/19/2001
Release Number: 01-274
Contact Name: Rita Ford
Phone Number: 202.693.8671
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Louisville, Kentucky - The U.S. Department of
Labor obtained a court order requiring Stock Yards Bank of Louisville,
Kentucky, to pay $325,000 to the employee stock ownership plan (ESOP) of
Building Services Unlimited, Inc., also of Louisville, for allegedly
improperly causing the plan to buy the company’s common stock at an
inflated price. |
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“This resolution sends the message that we won’t
tolerate the mishandling of people’s retirement funds,” said Secretary
of Labor Elaine L. Chao. |
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Stock Yards Bank was the trustee of the ESOP sponsored
by Building Services Unlimited for its employees. The plan, established
December 31, 1992, covered as many as 262 participants. |
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The consent order and judgment, entered on December 6,
in federal district court in Louisville, requires the bank to restore
losses suffered by the ESOP. The court action also appoints Larry Lefoldt
of Lefoldt & Co., P.A., as an independent fiduciary. |
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The Labor Department sued the bank, Building Services
Unlimited, and its owner, Maxine Mount, over a $1.35 million promissory
note under which Stock Yards Bank made monthly payments from the plan to
Mount in exchange for 30 percent of the company’s common stock. Mount
received over $290,000 between April 1993 and October 1994 as a result of
the transaction. |
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In addition to allegedly improperly causing the plan to
buy the company’s common stock at an inflated price, the lawsuit also
alleged that Stock Yards Bank and Mount violated the Employee Retirement
Income Security Act (ERISA) by using the plan assets for their own
benefit. Mount was previously ordered to restore $1,941,519 to the plan
and was permanently barred from servicing any plan governed by federal
employee benefit law. |
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The consent order and judgment resulted from an
investigation by the Cincinnati regional office of the department’s
Pension and Welfare Benefits Administration into alleged violations of
ERISA. Plan officials, participants, and beneficiaries can reach the
Cincinnati office at 859.578.4680 for help with any problems relating to
private-sector pension and health plans. |
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(Chao v. Building Services Unlimited
Civil Action No. 3-98-CV-700C) |
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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. |
