U.S. Labor Department Obtains Consent Judgment Restoring Funds to Portland Company’s Employee Stock Ownership Plan

Archived News Release — Caution: Information may be out of date.

Portland, Oregon - The U.S. Department of Labor has obtained a consent judgment in which funds will be restored to the Litho Development and Research Inc.’s employee stock ownership plan to cover losses resulting from fiduciary breaches by Ralph Johnson, the company's president, chief executive officer and the plan's trustee.

The agreement will settle all claims asserted in the department’s lawsuit which sought to remedy alleged violations of the Employee Retirement Income Security Act (ERISA). The Labor Department suit, which asserted that Johnson authorized an improper cash distribution to himself, sought restitution of all losses, plus interest, attributable to the alleged fiduciary breaches.

The consent judgment, entered in federal district court December 22, 2005, removes Johnson as plan trustee and appoints an independent fiduciary with full authority to liquidate the plan assets; identify legitimate claimants and pay the amount of their claims; distribute plan assets to eligible participants, and pay service providers. Johnson agrees to restore $100,000 to the plan within 60 days, none of which is to be allocated to his own plan account. In addition, Johnson is permanently enjoined from any future violations of ERISA.

“This case sends a strong message to those responsible for employee benefit plans that they cannot use their employees’ funds for their own personal benefit,” said Francis Clisham, regional director of the Labor Department’s Employee Benefits Security Administration (EBSA) in San Francisco, which investigated the case through its Seattle District Office.

Employers and workers can reach EBSA’s Seattle district office at 206.553.4244 or through its toll free number, 1.866.444.EBSA (3272), for help with problems relating to private sector retirement and health plans.

(Chao v. Johnson)
Adversary No. 3:05-cv-453-BR
United States District Court For The District of Oregon

U.S. Department of Labor news releases are accessible on the Department's Newsroom page. The information in this news release will be made available in alternate format upon request (large print, Braille, audio tape or disc) from the COAST office. Please specify which news release when placing your request at 202.693.7765 or TTY 202.693.7755. The U.S. Department of Labor is committed to providing America's employers and employees with easy access to understandable information on how to comply with its laws and regulations. For more information, please visit the Department's Compliance Assistance page.

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