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Court orders Chico, California steel fabrication company to restore more than $27,000 to 401(k) Plan
Date of Action: April 21, 2015
Type of Action: Consent Judgment and Order
Names of Defendants: Butte Steel & Fabrication Inc.; Jeffrey Brochheuser; and the Butte Steel & Fabrication Inc. 401(k) Profit Sharing Plan
Allegations: Owner Jeffrey Brochheuser caused Butte Steel & Fabrication Inc. to withhold more than $27,000 from employees’ paychecks from July 2010 to August 2012 that was never paid to their company sponsored 401k plan. Specifically, Butte Steel withheld at least $20,261 from employees’ pay for contribution to the 401(k) plan and at least $3,065 for participant loan repayments to the plan but failed to remit the amounts to the plan. Instead, Butte Steel retained the withheld amounts in its corporate account, in violation of the Employee Retirement Income Security Act. The complaint further alleges that from January 2009 to June 2010, Butte Steel withheld at least $52,139 from employees’ pay for contributions and at least $11,974 for participant loan repayments to the 401(k) plan and kept those funds in the corporate account for too long before remitting to the plan.
Resolution: In accordance with the Consent Judgment and order, Brochheuser restored all losses, including lost opportunity costs, to the 401(k) plan. The order permanently enjoins Brochheuser from serving as a fiduciary or service provider to any plan covered by the Employee Retirement Income Security Act. The court also ordered Brochheuser to take the necessary steps of winding up the plan, including making contributions and filing the terminal annual report by July 21, 2015. In the event that Brochheuser fails to meet the deadline, the court has ordered the appointment of an independent fiduciary to distribute the plan’s assets to the participants and beneficiaries, and conclude any plan-related matters connected with its proper termination.
Court: United States District Court, Eastern District of California
Docket Number: 2:15-cv-00118-MCE-KJN
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