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News Release

U.S. Labor Department Sues Baltimore Co. for Failing to Distribute 401(K) Funds After It Went Out of Business

Archived News Release — Caution: Information may be out of date.

Baltimore - The U.S. Labor Department has sued the King Tile Co., Baltimore, Maryland, for failing to administer and terminate the company’s 401(k) plan so that assets could be distributed to plan participants.

“The department took legal action to ensure that the participants received their promised benefits,” said Mabel Capolongo, director of the department’s Philadelphia regional office of the Employee Benefits Security Administration (EBSA).

The lawsuit alleges that the ceramic tile business, which served as plan administrator and fiduciary, failed to take responsibility for terminating the plan and distributing its assets to participants and beneficiaries when the company ceased doing business in 2003.

The suit seeks to appoint an independent fiduciary to manage the plan, terminate it and distribute the assets to eligible participants and beneficiaries. The suit, filed in federal district court in Baltimore, resulted from an investigation conducted by EBSA’s Philadelphia office.

To assist workers in similar situations, the Labor Department instituted new rules last May to facilitate a voluntary, safe and efficient process for winding up the affairs of abandoned plans. The rules allow financial institutions to take responsibility and distribute the assets of 401(k) plans to affected workers and their families. The department estimates that 1,650 such plans are abandoned each year.

Employers and workers with questions or concerns regarding their private-sector pension and health plans can contact EBSA’s Philadelphia office at 215.861.5300 or EBSA’s toll free number, 1.866.444.EBSA (3272). Information is also available from the agency’s Web site at

In fiscal year 2005, EBSA achieved record monetary results of $1.7 billion related to pension, 401(k), health and other benefits for millions of American workers and their families.

(Chao v. The King Tile Company)
Civil Action No. 1:06-cv-3062

U.S. Department of Labor news releases are accessible on the Department's Newsroom page. The information in this news release will be made available in alternate format upon request (large print, Braille, audio tape or disc) from the COAST office. Please specify which news release when placing your request at 202.693.7765 or TTY 202.693.7755. The U.S. Department of Labor is committed to providing America's employers and employees with easy access to understandable information on how to comply with its laws and regulations. For more information, please visit the Department's Compliance Assistance page.

Archived News Release — Caution: Information may be out of date.

Contact Name: Kate Dugan
Phone Number: 215.861.5101

Employee Benefits Security Administration
November 27, 2006
Release Number
06-2000-PHI (EBSA 06-168)