Labor Department Sues Ohio Glass Company and 401(k) Plan Trustee Over Delinquent Employee Contributions and Loan Payments

Archived News Release — Caution: Information may be out of date.

Cincinnati, Ohio - The U.S. Department of Labor filed a lawsuit on March 17 against the 401(k) trustee of the Glass Service Company’s (GSC) plan for failing to forward $31,911.30 in employee contributions and loan repayments to the plan and retaining the contributions with the general assets of the company.

The department simultaneously filed an adversary complaint in federal bankruptcy court to prevent defendant Kevin W. Collis from discharging any debt owed to the plan in bankruptcy proceedings.

The suit alleges that from January 1, 2000 through February 28, 2001, GSC withheld from employees’ pay contributions to the plan and failed to timely remit them to the plan’s accounts. From March 1, 2001 through April 30, 2002, GSC continued to withhold employee contributions, failing to remit them to the plan. In addition, GSC withheld employee loan repayments to the plan from January 1, 2001 through March 31, 2002.

The lawsuit, filed in federal district court in Columbus, Ohio, seeks the appointment of an independent fiduciary to manage and terminate the plan. The suit also seeks to remove Collis, GSC president and the plan trustee, from his position as fiduciary to the plan, to require him to repay the plan for the losses and to permanently bar him from acting in a trust capacity to any plan covered under the Employee Retirement Income Security Act (ERISA).

Glass Service Company, Inc. of Lancaster, Ohio, a wholesale and retail window glass products sales and service firm, lost its corporate status with the State of Ohio in December 2002. Collis filed for Chapter 7 bankruptcy on December 11, 2002. The plan had 26 participants and assets totaling $113,000.

Joseph Menez, director of the department’s Cincinnati Regional Office of the Employee Benefits Security Administration (EBSA), said, “Even when a plan fiduciary declares personal bankruptcy, we act to recoup as much money as possible for plan participants to pay promised retirement benefits.”

Employers with similar problems, who are not yet the subject of an investigation by EBSA, may be eligible to participate in the department's Voluntary Fiduciary Correction Program (VFCP). Participation in the VFCP requires employers to make workers whole but allows them to avoid EBSA enforcement actions, civil penalties and any applicable excise taxes. For more information see www.dol.gov/ebsa.

Employers and workers can contact the Cincinnati Regional Office at 859.578.4680 or EBSA’s toll free number, 1.866.444.EBSA (3272), for help with any problems relating to private-sector pension and health plans.

(Chao v. Kevin W. Collis)
Civil Action No. C2 03 2333
Bankruptcy Action 03-02122

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