Georgian Art Lighting Design Chair To Repay 401(K) Plan And To Settle With Health Plan Service Providers And Participant

Archived News Release — Caution: Information may be out of date.

The U.S. Department of Labor has settled its lawsuit with Georgian Art Lighting Designs, Inc., of Lawrenceville, Ga. and its owner for failing to deposit employee contributions into the company’s 401(k) pension and medical plan accounts.

Company chairman Lyonel M. Joffre was ordered to pay the 401(k) plan $30,022.02, including interest, within 30 days from the filing of this consent order, and also was directed by the court to reimburse plan participant Charles Shadburn and several service providers specific amounts outlined in the consent order/settlement. Joffre will be allowed to negotiate with the service providers to reduce the amounts owed and must affirm to participant Shadburn that the service providers will seek no further payment from him.

According to the settlement, all other healthcare claims against the health plan have been satisfied. Finally, Joffre was barred permanently from serving the company’s plans and also was barred for five years from serving in any capacity — for compensation or otherwise — to any employee benefit plan subject to the Employee Retirement Income Security Act (ERISA).

Georgian Art Lighting, which manufactures decorative lighting fixtures, filed for Chapter 11 bankruptcy in 1997. The company sponsored a self-funded health plan and 401(k) plan for some 85 participants and both plans were funded through weekly deductions from employees’ paychecks. The retirement plan had assets of $758,191 at the end of 1995.

According to the lawsuit, the company and Joffre violated ERISA when they failed to deposit employee contributions into trusts for the health and 401(k) plans. The defendants allegedly allowed $26,133 of contributions owed to the health plan to be used for the company’s benefit by commingling the contributions with general assets of the company starting in August 1996. The department’s suit also alleged that they improperly failed to remit $22,855.50 in contributions withheld from the employees’ paychecks to the 401(k) plan from May to October 1996.

“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, director of the Labor Department’s Atlanta Regional Office of the Pension and Welfare Benefits Administration. “Employers and workers can reach us at (404) 562-2156 in Atlanta for help with any problems relating to private-sector pension and health plans.”

The consent order/settlement, the result of an investigation conducted by PWBA’s Atlanta Regional Office which enforces ERISA, was entered January 19, 2000 in federal district court in Atlanta.

(Herman v. Georgian Art Lighting Design, Inc.)
Civil Action # 1:99-CB-2535

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