Court Prohibits Md. Companies, Trustees From Depleting Pension Assets

Archived News Release — Caution: Information may be out of date.

The U. S. Department of Labor has obtained a temporary restraining order to prevent trustees and plan administrators of the profit sharing plans of Della Ratta, Inc. and Commercial Management Company, located in Silver Spring, Md. from continuing to deplete assets of the plans.

A hearing on the department’s request for a preliminary injunction is scheduled for Dec. 11 in federal district court in Greenbelt, Md. The temporary restraining order prohibits the companies and trustees Joseph M. Della Ratta and Joseph E. Brimmer from withdrawing any assets of the plans or exercising control over those assets.

Della Ratta, Inc. (DRI), a construction company, and Commercial Management Company (CMC), a real estate management firm, are the sponsors and administrators of the profit sharing plans for approximately 32 participants. Della Ratta is an officer of the companies as well as a trustee of the plans. Brimmer is an officer of DRI and a trustee of the plans. Both plans were terminated in 1999.

A lawsuit was filed simultaneously with the temporary restraining order on Dec. 1, alleging that the Della Ratta, Brimmer, DRI and CMC violated their fiduciary duties under the Employee Retirement Income Security Act (ERISA). According to the lawsuit, the defendants:

• improperly transferred $112,585 in plan assets to a bank account of Della Ratta, Inc. when the profit sharing plans were terminated;
• used plan assets to pay a $40,000 debt owed to the Internal Revenue Service; and
• failed to distribute assets to all participants upon termination of the DRI and CMC plans.

The department alleged that Della Ratta, Brimmer, DRI and CMC violated their duties as trustees and plan administrators by failing to make distributions to all participants when the plans were terminated and using plan assets to benefit themselves.

As relief, the department has asked the court to grant a preliminary injunction barring the defendants from releasing, distributing or having control over the plans’ assets, to remove the defendants from their positions with the plan and to appoint an independent fiduciary to receive and manage all assets of the plans. It also seeks to permanently bar the defendants from serving in positions of trust to any plan governed by ERISA in the future. It also asks that the defendants repay $40,000 with interest and return all plan assets improperly received by them.

This case resulted from an investigation conducted by the Washington, D.C. 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 Mabel Capolongo, director of PWBA’s Philadelphia Regional Office. "Employers and workers can reach us at (215) 861-5300 for help with any problems relating to private-sector pension and health plans."

(Herman v. Della Ratta)
Civil Action No. AW–00-3534

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