[Prohibited Transaction Exemption 2000-21; Exemption Application No. D-
10777, et al.] [Notices] [05/23/2000]
[Prohibited Transaction Exemption 2000-21; Exemption Application No. D-
10777, et al.] [05/23/2000]
Volume 65, Number 100, Page 33376-33377
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DEPARTMENT OF LABOR
Pension and Welfare Benefits Administration
[Prohibited Transaction Exemption 2000-21; Exemption Application No. D-
10777, et al.]
Grant of individual exemptions; Texas Iron Workers and Employers
Apprenticeship Training and Journeyman Upgrading Fund (the Plan)
AGENCY: Pension and Welfare Benefits Administration, Labor.
ACTION: Grant of individual exemptions.
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SUMMARY: This document contains exemptions issued by the Department of
Labor (the Department) from certain of the prohibited transaction
restrictions of the Employee Retirement Income Security Act of 1974
(the Act) and/or the Internal Revenue Code of 1986 (the Code).
Notices were published in the Federal Register of the pendency
before the Department of proposals to grant such exemptions. The
notices set forth a summary of facts and representations contained in
each application for exemption and referred interested persons to the
respective applications for a complete statement of the facts and
representations. The applications have been available for public
inspection at the Department in Washington, D.C. The notices also
invited interested persons to submit comments on the requested
exemptions to the Department. In addition the notices stated that any
interested person might submit a written request that a public hearing
be held (where appropriate). The applicants have represented that they
have complied with the requirements of the notification to interested
persons. No public comments and no requests for a hearing, unless
otherwise stated, were received by the Department.
The notices of proposed exemption were issued and the exemptions
are being granted solely by the Department because, effective December
31, 1978, section 102 of Reorganization Plan No. 4 of 1978, 5 U.S.C.
App. 1 (1996), transferred the authority of the Secretary of the
Treasury to issue exemptions of the type proposed to the Secretary of
Labor.
Statutory Findings
In accordance with section 408(a) of the Act and/or section
4975(c)(2) of the Code and the procedures set forth in 29 CFR Part
2570, Subpart B (55 FR 32836, 32847, August 10, 1990) and based upon
the entire record, the Department makes the following findings:
(a) The exemptions are administratively feasible;
(b) They are in the interests of the plans and their participants
and beneficiaries; and
(c) They are protective of the rights of the participants and
beneficiaries of the plans.
Texas Iron Workers and Employers Apprenticeship Training and
Journeyman Upgrading Fund (the Plan), Located in San Antonio, Texas
[Prohibited Transaction Exemption 2000-21; Exemption Application No. D-
10777]
Exemption
The restrictions of sections 406(a), 406(b)(1) and (b)(2) of the
Act shall not apply to the purchase of a classroom/office building and
a shop building (together, the Buildings) and an adjacent lot (the
Adjacent Lot) by the Plan from Local Union No. 66 of the International
Association of Bridge, Structural, Ornamental and Reinforcing Iron
Workers, for $63,000, provided that: (a) The purchase is a one-time
transaction for cash, and no commissions are paid by the Plan with
respect to the transaction; (b) the Plan pays a price for the Buildings
and the Adjacent Lot (collectively, the Properties) that is no more
than the fair market value of the Properties at the time of the
transaction, as determined by a qualified, independent appraiser; (c)
the Plan's independent fiduciary has determined that the transaction is
appropriate for the Plan and in the best interests of the Plan and its
participants and beneficiaries; and (d) the Plan's independent
fiduciary monitors the purchase of the Properties by the Plan and takes
whatever action is necessary to safeguard the interests of the Plan and
its participants and beneficiaries.
For a more complete statement of the facts and representations
supporting the Department's decision to grant this exemption, refer to
the notice of proposed exemption published on March 22, 2000 at 65 FR
15367.
For Further Information Contact: Gary H. Lefkowitz of the
Department, telephone (202) 219-8881. (This is not a toll-free number.)
Bankers Trust Company (BTC), Located in New York, New York
[Prohibited Transaction Exemption 2000-22; Application No. D-10838]
Exemption
The restrictions of section 406(a) of the Act and the sanctions
resulting from the application of section 4975 of the Code, by reason
of section 4975(c)(1)(A) through (D) of the Code, shall not apply to:
(1) The granting to BTC (a) by the Cheslock-Bakker Opportunity Fund,
L.P. (the LP) of security interests in (i) the capital commitments and
capital contributions (Capital Contributions) of certain employee
benefit plans (the Plans) investing in the LP and (ii) a borrower
collateral account to which all Capital Contributions will be deposited
when paid and (b) by the LP and by its general partner, CBA Real Estate
Partners, LLC, a Delaware limited liability company, of the right to
make calls for cash contributions (Contribution Calls) under the
Cheslock-Bakker Opportunity Fund, L.P. Limited Partnership Agreement,
where BTC is the representative of certain lenders (the Lenders) that
will fund a so-called ``credit facility'' providing credit to the LP,
and where the Lenders are parties in interest with respect to the
Plans; and (2) the execution of a partner agreement and estoppel (the
Estoppel) under which the Plans agree to honor the Contribution Calls;
provided that (a) the grants and Estoppels are on terms no less
favorable to the Plans than those which the Plans could obtain in
arm's-length transactions with unrelated parties; (b) the decisions on
behalf of each Plan to invest in the LP and to execute such Estoppels
in favor of BTC are made by a fiduciary which is not included among,
and is independent of and unaffiliated with, the Lenders and BTC; (c)
with respect to Plans that have invested or may invest in the LP in the
future, such Plans have or will have assets of not less than $100
million and not more than 5% of the assets of any such Plan are or will
be invested in the LP. For purposes of this condition (c), in the case
of multiple plans maintained by a single employer or single controlled
group of employers, the assets of which are invested on a commingled
basis, (e.g., through a master trust), this $100 million threshold will
be applied to the aggregate assets of all such plans; and (d) the
general partner of the LP must be
[[Page 33377]]
independent of BTC, the Lenders and the Plans.
For a more complete statement of the facts and representations
supporting the Department's decision to grant this exemption, refer to
the notice of proposed exemption published on March 14, 2000 at 65 FR
13855.
For Further Information Contact: Gary H. Lefkowitz of the
Department, telephone (202) 219-8881. (This is not a toll-free number.)
Bay Internists, Inc. Profit Sharing Plan (the Plan) Located in
Kilmarnock, Virginia
[Prohibited Transaction Exemption 2000-23; Exemption Application No. D-
10847]
Exemption
The restrictions of sections 406(a), 406(b)(1) and (b)(2) of the
Act and the sanctions resulting from the application of section 4975 of
the Code, by reason of section 4975(c)(1)(A) through (E) of the Code,
shall not apply to the proposed sale by the Plan of certain unimproved
real property (the Property) located in Kilmarnock, Virginia, to Bay-
Med, a general partnership which is a party in interest with respect to
the Plan, provided that the following conditions are satisfied:
(a) The proposed sale is a one-time cash transaction;
(b) The Plan receives the current fair market value for Property,
as established at the time of the sale by an independent, qualified
appraiser; and
(c) The Plan pays no commissions or other expenses associated with
the sale.
For a more complete statement of the facts and representations
supporting the Department's decision to grant this exemption, refer to
the notice of proposed exemption published on March 14, 2000 at 65 FR
13858.
For Further Information Contact: Ekaterina A. Uzlyan of the
Department at (202) 219-8883. (This is not a toll-free number.)
Foodcraft, Inc. Defined Benefit Plan (the Plan) Located in Los
Angeles, California
[Prohibited Transaction Exemption 2000-24; Exemption Application No. D-
10864]
Exemption
The restrictions of sections 406(a) and 406(b)(1) and (b)(2) of the
Act and the sanctions resulting from the application of section 4975 of
the Code, by reason of section 4975(c)(1)(A) through (E) of the Code,
shall not apply to the cash sale (the Sale) of certain improved real
property (the Property) by the Plan to the trustees of the Plan, Ernest
Lieblich and Caryl Lieblich (collectively, the Trustees), parties in
interest and disqualified persons with respect to the Plan, provided
that the following conditions are met:
(a) All terms and conditions of the Sale are no less favorable to
the Plan than those which the Plan could obtain in an arm's length
transaction with an unrelated party;
(b) The Trustees will purchase the Property from the Plan for the
greater of $315,000 or the Property's fair market value as of the date
of the transaction as determined by a qualified, independent appraiser;
(c) The Sale will be a one-time transaction for cash; and
(d) The Plan will pay no fees or commissions in connection with the
Sale.
For a more complete statement of the facts and representations
supporting the Department's decision to grant this exemption, refer to
the notice of proposed exemption published on March 22, 2000 at 65 FR
15369.
For Further Information Contact: Mr. J. Martin Jara, U.S.
Department of Labor, telephone (202) 219-8883. (This is not a toll-free
number.)
General Information
The attention of interested persons is directed to the following:
(1) The fact that a transaction is the subject of an exemption
under section 408(a) of the Act and/or section 4975(c)(2) of the Code
does not relieve a fiduciary or other party in interest or disqualified
person from certain other provisions to which the exemptions does not
apply and the general fiduciary responsibility provisions of section
404 of the Act, which among other things require a fiduciary to
discharge his duties respecting the plan solely in the interest of the
participants and beneficiaries of the plan and in a prudent fashion in
accordance with section 404(a)(1)(B) of the Act; nor does it affect the
requirement of section 401(a) of the Code that the plan must operate
for the exclusive benefit of the employees of the employer maintaining
the plan and their beneficiaries;
(2) These exemptions are supplemental to and not in derogation of,
any other provisions of the Act and/or the Code, including statutory or
administrative exemptions and transactional rules. Furthermore, the
fact that a transaction is subject to an administrative or statutory
exemption is not dispositive of whether the transaction is in fact a
prohibited transaction; and
(3) The availability of these exemptions is subject to the express
condition that the material facts and representations contained in each
application accurately describes all material terms of the transaction
which is the subject of the exemption.
Signed at Washington, DC, this 18th day of May, 2000.
Ivan Strasfeld,
Director of Exemption Determinations, Pension and Welfare Benefits
Administration, Department of Labor.
[FR Doc. 00-12947 Filed 5-22-00; 8:45 am]
BILLING CODE 4510-29-P
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