Labor Department Obtains Final Settlement With Fla. Resort Pension Fund Officials

Archived News Release — Caution: Information may be out of date.

The U. S. Department of Labor has obtained a final settlement permanently barring the owners of G&L Resorts, Inc. in Ormond Beach, Fla. from serving any employee benefit plan governed by the Employee Retirement Income Security Act.

The court settlement, entered on June 13 in federal district court in Orlando, also appointed Larry Lefoldt of Lefoldt and Co. in Jackson, Miss. as the independent fiduciary with authority to manage the pension plan’s assets, to orderly terminate the plan by Aug. 31 and to distribute the assets to eligible plan participants.

In order to make the innocent plan participants whole, defendants Gilbert and Linda Ward also waived their rights to benefits under the plan and must make additional contributions to fund the plan’s terminations if there are insufficient assets to do so.

The settlement supersedes an interim settlement obtained May 12, 1999. A lawsuit filed simultaneously with the interim settlement alleged that the Wards failed to terminate the pension plan or distribute its assets after deciding in 1991 to terminate the plan. As a result, the department contends that benefits continued to accrue from 1991 to the present.

Instead of distributing benefits under the plan, the Wards also were alleged to have withdrawn $111,223 from the plan’s trust account in 1993 to pay a balloon mortgage on the resort property. After the Labor Department informed them of the impropriety of the transaction, the loan was repaid with interest. However, the department alleged the interest did not fully compensate the plan for losses.

G&L Resorts created a defined benefit plan, which covered approximately 25 participants and had $354,039 in assets as of Oct. 30, 1997. The company, which sold its assets on Aug. 1, 1998, provided a camper resort for tourists and permanent residence for many retirees.

This case resulted from an investigation conducted by the Miami District Office of the department’s Pension and Welfare Benefits Administration (PWBA) into alleged violations of 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 Jesse Day, director of the Miami District Office. “Employers and workers can reach us at 954/424-4022 for help with any problems relating to private-sector pension and health plans.”

(Herman v. G&L Resorts, Inc.)
Civil Action #99-521-CIV-ORL-18

U.S. Department of Labor news releases are accessible on the Internet. The information in this news release will be made available in alternate format upon request (large print, Braille, audio tape or disc) from the Central Office for Assistive Services and Technology. Please specify which news release when placing your request. Call 202.693.7773 or TTY 202.693.7775.

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