Atlanta Trustee To Repay More Than $175,000 To Employee Stock Plan

Archived News Release — Caution: Information may be out of date.

A former trustee of the Atlanta Motor Lines, Inc. Employee Stock Ownership Plan (ESOP) has agreed to restore $175,000 to the plan and to waive his right to pension benefits under the plan and severance benefits from the company as a part of a settlement of a lawsuit filed by the U.S.Department of Labor.

Carleton E. (Bert) Kline, a former trustee of the plan, also was barred for five years from serving in a position of trust to any plan governed by the Employee Retirement Income Security Act (ERISA).

“Our goal is to assure that consumers know that the department is only a phone call away to help protect the benefits promised by employers,” said Howard Marsh, regional director of the Atlanta Regional Office of the Labor Department’s Pension and Welfare Benefits Administration. “Employers and workers can reach us at 404-562-2156 for help with any problems relating to private-sector pension and health plans.”

Atlanta Motor Lines was a regional carrier in the trucking industry. In 1983, the company created the ESOP which owned more than 48 percent of the company stock by 1988. The original owners of the company, brothers Jennings and James Watkins, sold all remaining shares of outstanding company stock to the ESOP in 1987 and resigned their positions with the company and the plan.

Subsequently, Kline, his wife, Ed Copenhaver and Ben Rainey were named as directors of the company, trustees of the ESOP and members of the plan committee as well as plan administrator.

From 1987 until 1996, the ESOP owned 100 percent of the company. In late 1997, management decided to terminate the company due to its continuing lack of profitability The company submitted a proxy to plan participants who approved the sale as did Kline, who by then was the sole remaining trustee. A public auction was held in February 1998, but real estate holdings and receivables are still being liquidated.

Since Feb. 17, 1998, when Kline resigned, Seymour R. Zilberstein, a principal of Consulting Fiduciaries, Inc., was retained by the board as an independent fiduciary to liquidate the plan. The ESOP had assets of $4.2 million in 1998 and 445 participants.

According to the lawsuit, Kline and now deceased co-trustee Ed Copenhaver falsified corporate minutes to indicate that stock option agreements, eventually generating $886,350 apiece for Kline and Copenhaver, were approved by the board of directors. Kline and Copenhaver also established a partnership, Metro Investments, which they used to overcharge Atlanta Motor Lines for leasing of terminal space and equipment. As a result, the company’s financial condition was adversely affected, thereby decreasing the value of company stock held by the ESOP.

The settlement agreement and consent order, resulting from an investigation conducted by the Atlanta Regional Office of PWBA, were entered in federal district court in Atlanta on Jan. 11, 2000.

(Herman v. Carleton E. Kline)
Civil Action No. 1-00-CV-0014

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