Date of Action: May 7, 2013
Type of Action: Consent Judgment and Order
Name(s) of Defendant(s): First Restoration Services, Inc. and Frank Headen
Allegations: In 1999, First Restoration Services, Inc., based in Charlotte, N.C., established a 401(k) plan for its employees. During the course of an investigation by the U.S. Department of Labor’s Employee Benefits Security Administration, the agency found that from April 2008 to September 2008, First Restoration and Frank Headen failed in their fiduciary responsibility to forward $27,637 in employee contributions to the First Restoration Services Inc. 401(k) retirement plan in a timely manner and also allowed the funds to be commingled with general company assets and to be used for company purposes and obligations rather than for the exclusive benefit of the plan.
Resolution: The defendants have restored all contributions owed to the plan, including interest or lost opportunity costs, with the exception of contributions and lost earnings owed to Headen. The order requires the defendants to take all necessary and appropriate steps to terminate the plan and distribute the assets to participants and beneficiaries no later than June 1, 2013. If the defendants are unable or unwilling to complete the termination and distribution by the time specified, the secretary of labor may seek the appointment of an independent fiduciary to the plan for the purpose of terminating the plan and distributing the plan’s assets. If an independent fiduciary is appointed, the defendants shall bear all necessary and reasonable costs of the independent fiduciary.
Court: United States District Court, for the Western District of North Carolina, Charlotte Division
Docket Number: 3:12-cv-00828-GCM-DSC
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