Labor Department Sues Plan Officials for Mismanaging South Carolina Employee Stock Ownership Plans

Archived News Release — Caution: Information may be out of date.

Atlanta, Georgia - The U.S. District Court for the District of South Carolina has consolidated a lawsuit brought by the U.S. Department of Labor with a private suit against fiduciaries of the employee stock ownership plan (ESOP) of Cameron & Barkley Company, now part of Hagemeyer North America Inc., located in Charleston, South Carolina. The Labor Department’s suit alleged that participants suffered more than $1 million in losses when the ESOP purchased company stock at an inflated price.

“These workers were counting on their employee stock ownership plan for their retirement,” said Secretary of Labor Elaine L. Chao. “The department is taking this legal action to restore the workers’ assets and protect their retirement dreams.”

The suit alleges that Hagemeyer North America Inc., GreatBanc Trust Company, and members of the plan administrative and advisory committees violated the Employee Retirement Income Security Act (ERISA) by mismanaging two ESOPs sponsored by the Cameron & Barkley Company (C&B) and Cambar Software Inc. (CSI).

C&B provided maintenance, repair and operating products in the electrical construction industry, and it created Camber Software Inc. (CSI) as a software and consulting services company. CSI employees were covered by the C&B ESOP, until C&B merged with Hagemeyer in 2000. CSI was not part of the merger and its employees were spun off to a new ESOP.

As of December 31, 1999, the C&B ESOP reported over $147.5 million in assets and covered 2,533 participants. The alleged violations occurred when C&B merged with Hagemeyer in 2000.

The suit seeks a court order requiring the defendants to restore to the plan all losses with interest, return any illegal profits received by them and undo any transactions prohibited by federal benefits law. The suit also asks that there be an accounting of the escrow monies and appropriate allocation of funds with interest to the C&B and CSI ESOPs.

The suit resulted from an investigation conducted by the Atlanta regional office of the Labor Department’s Employee Benefits Security Administration (EBSA). In fiscal year 2005, the department achieved monetary results of $1.7 billion in pension, 401(k), health and other benefits for millions of American workers and their families.

Employers and workers may contact the Atlanta office of the EBSA at 404.562.2156 or toll-free at 1.866.444.EBSA (3272), for help with problems relating to private-sector pension and health plans.

(Chao v. Hagemeyer North America, Inc.)
Civil Action No. 2:06-cv-01173-PMD

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.

Contact Name: David James/Gloria Della
Phone Number: 202.693.4676/202.693.8664