Labor Department Recovers Over $400,000 For Delaware Pension Plan Participants

Archived News Release — Caution: Information may be out of date.

The U. S. Department of Labor has obtained a consent order whereby trustees of the John E. Healy & Sons Pension Plan of New Castle, Del. restore $413,927 to the plan through forfeiture of their right to benefits under the plan.

Benefits forfeited by trustees James V. and Michael J. Healy -- defendants in a lawsuit filed in Nov. 10, 1999 by the Department for violations of Employee Retirement Income Secuirty Act (ERISA) -- will be reallocated to the accounts of plan participants other than themselves. The court order also removed the defendants from their position as fiduciaries with the plan and appointed Alan N. Kanter & Associates of Baltimore, Maryland to be the independent fiduciary to manage and operate the plan.

“Our goal is to protect the hard-earned benefits of workers and their families against misuse," said Mabel L. Capolongo, regional director of the Philadelphia Regional Office of the Labor Department’s Pension and Welfare Benefits Administration. “Employers and workers can reach us at 215-861-5300 for help with any problems relating to private-sector pension and health plans.”

According to the lawsuit, James V. Healy was alleged to have loaned plan money to his financially troubled companies during 1994 and 1996. The loans were unsecured and made without any promissory notes or specified repayment terms. Michael J. Healy was charged with allowing these loans to be made and failure to reverse them once he became aware that the loans had been made.

The Department alleges that the loans were never fully repaid, thereby causing losses to the plan as a result of the below-market interest rates applied by the Healys in determining the amounts owed by the companies on the plan loans.

The pension plan is sponsored by Healy Management Services, Inc, a subsidiary of the Healy Group, Inc. The Healy Group, Inc. and its subsidiaries, which also includes John E. Healy & Sons, Inc., provide construction management services primarily in the Delaware area.

As of October 1997, the plan covered approximately 29 current and former employees of Healy Management Services, Inc. and John E. Healy & Sons. At that time, the plan had just over $1 million in benefit obligations and approximately $296,000 in net assets available to pay benefits.

The consent order was entered on Aug. 17 in federal district court in Wilmington, Del. This lawsuit resulted from an investigation conducted by PWBA’s Philadelphia Regional Office into alleged violations of ERISA.

(Herman v. Healy)
Civil Action No. 99-V-774

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