EBSA News Release: November 16, 2010
U.S. Labor Department sues defunct Franklin, Tenn., homebuilder to restore losses suffered by 401(k) retirement plan participants and beneficiaries
FRANKLIN, Tenn. - The U.S. Department of Labor is suing defunct homebuilder Corinthian Custom Homes Inc. and its fiduciaries to restore losses suffered by participants and beneficiaries of the company's 401(k) retirement plan.
The lawsuit followed an investigation by the department's Employee Benefits Security Administration into alleged violations of the Employee Retirement Income Security Act. The suit alleges that between 2005 and 2007 the defendants withheld $100,248.96 in employee contributions owed to the company's 401(k) plan but failed to forward the assets to the plan in a timely manner. This resulted in $13,036.16 in lost earnings opportunities to the plan's participants on those untimely and delinquent contributions.
"When employees make contributions to their company's 401(k) retirement plan, they have a right to expect that plan fiduciaries will act solely in the interest of the plan's participants and beneficiaries," said R.C. Marshall, EBSA's regional director in Atlanta, Ga.
Filed in the U.S. District Court for the Middle District of Tennessee-Nashville Division, the suit names as defendants the company; Nicholas Psillas, president of the company; Deborah Psillas, fiduciary with authority over the company's operating account; and Richard DePriest, chief financial officer.
The department is asking the court to order the defendants to restore all losses including lost interest and opportunity costs, and require that any claims of the defendants to plan assets be offset against the losses owed to the plan. The suit seeks to permanently bar the defendants from serving in a fiduciary capacity to any employee benefit plan subject to ERISA and that an independent fiduciary be appointed to oversee the plan at the defendants' expense.
Corinthian Custom Homes was a homebuilder based in Franklin, Tenn., that filed for bankruptcy in 2008.
This case is part of EBSA's employee contribution project to safeguard workers' contributions to 401(k) and health benefit plans. Employers and workers can reach EBSA's Atlanta Regional Office at 404.302.3900 or toll-free at 866.444.3272 for help with problems relating to private sector retirement and health plans. Additional information can be found at http://www.dol.gov/ebsa.
Solis v. Corinthian Custom Homes Inc.
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