Minnesota Auto Dealership and Executives Must Restore $145,000 to Company Profit Sharing Plan

Archived News Release — Caution: Information may be out of date.

Kansas City, Missouri - Johnson Motor Company, Inc. of Glencoe, Minnesota, and two corporate executives were ordered to restore $144,741.94 to the company’s profit sharing plan in a consent judgment and order obtained August 30, by the U.S. Department of Labor. Named as defendants were the Johnson Motor Company, Richard D. Johnson, its president, and Robert L. Johnson, its vice president. Robert Johnson was also trustee of the profit sharing plan.

The action resulted from a lawsuit filed by the department in March alleging the profit sharing plan made a series of unsecured loans without executing loan agreements and failed to report the loans on annual reports required by the Labor Department. The lawsuit also alleged the plan made additional prohibited transaction loans to the Johnsons totaling $35,500, without reporting them on the annual reports. The loans were not repaid. Johnson Motor Company ceased operations on August 31, and surrendered its assets to Chrysler Financial.

The Johnsons were ordered to waive their rights to $252,265 owed to them. In addition to the amount ordered paid in the consent judgement, an additional $108,000 was restored to the plan before the judgement was entered.

The judgment also requires the Johnsons to terminate the plan and notify participants that they may roll over contributions into another qualified retirement plan. They may no longer serve as fiduciaries to any plan subject to provisions of the Employee Retirement Income Security Act.

“This case exemplifies our commitment to protect workers’ hard-earned benefits,” said Gregory Egan, regional director in Kansas City for the Pension and Welfare Benefits Administration. “Workers can help us protect their benefits by contacting our office at 816.426.5131 if they have questions or suspect abuse of their pension, health or other benefit

The consent judgment and order resulted from an investigation by the Kansas City regional office of the PWBA. It was entered in the federal district court in Minneapolis, Minnesota.

(Chao v. Johnson Motor Company, Inc.
Civil Action No. 01-514JRT/FLN)

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Archived News Release — Caution: Information may be out of date.