Date of Action: March 27, 2015
Type of Action: Complaint
Names of Defendants: James H. Carmichael, The Specialty Restaurant Group LLC 401(k) Plan, and The Specialty Restaurant Group LLC Group Health Plan
Allegations: Specialty Restaurant Group LLC, based in Maryville, Tennessee, established the Specialty Restaurant Group LLC 401(k) Plan in 2008 and The Specialty Restaurant Group LLC Group Health Plan in 2010. The U.S. Department of Labor’s Employee Benefits Security Administration opened an investigation and found that from January 2, 2008 through May 26, 2012, the defendants failed in their fiduciary responsibility to forward $62,387.31 in employee contributions and $964.32 in participant loan payments to the 401(k) plan in accordance with the Employee Retirement Income Security Act of 1974. Also, during the same time period, the defendants failed to timely forward employee contributions and participant loan payments into the plan, resulting in $19,471.35 in lost earnings owed to non-fiduciary plan participants.
From September 2011 through December 2011, the defendants withheld $11,099.02 in employee contributions for insurance premium payments from the company’s fully insured group health plan and failed to forward those contributions to the insurance carrier, Humana. As a result, Humana cancelled the company’s insurance policy for non-payment of premiums, causing participants to incur unpaid medical claims totaling $23,485.89.
Resolution: The department is asking the court to order James Carmichael to restore all losses to the 401(k) plan, including interest or lost opportunity costs, which occurred as a result of his breaches of fiduciary obligations. The department is also asking the court to order Carmichael to restore to the health plan participants all of their withheld insurance premiums and reimburse all of the affected plan participants their unpaid medical bills which occurred as a result of his breaches of fiduciary obligations. The department is also seeking to permanently enjoin Carmichael from serving as fiduciary, administrator, officer, trustee, custodian, agent, employee representative, or having control over the assets of any employee benefit plan subject to ERISA. Carmichael would also be enjoined from engaging in any further action in violation of Title I of ERISA; as well as pay the plaintiff’s costs of this action; and provide such other relief as may be just and equitable, including, but not limited to, surcharge.
Court: United States District Court for the Eastern District of Tennessee, Northern Division
Docket Number: 3:15-cv-134
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