U.S. Labor Department Obtains Appointment of Independent Fiduciaries for Abandoned Providence, Rhode Island, Pension Plan

Archived News Release — Caution: Information may be out of date.

Providence, Rhode Island - The U.S. Department of Labor has obtained a court order appointing two independent fiduciaries to manage the abandoned pension plan originally sponsored by Providence, Rhode Island-based Arnold Kilberg & Company (AK&C) and owner Arnold Kilberg.

According to James Benages, regional director for the Labor Department’s Employee Benefits Security Administration (EBSA) in Boston, Kilberg and AK&C sponsored the Northeast Capital Corp. Money Purchase Pension Plan & Trust for the benefit of their employees. Kilberg filed for personal bankruptcy in March 2004 and his accounting firm went out of business about a month later without ensuring the appointment of a fiduciary to oversee distribution of the plan’s assets to participants. As of March 31, 2001, the plan had 11 participants and beneficiaries who were owed $89,566.58.

The department’s lawsuit, filed earlier this year in U.S. District Court for the District of Rhode Island, sought the appointment of an independent fiduciary to administer the plan. On November 13, the court entered an order appointing Joseph M. DiOrio, Esq., the trustee of Arnold Kilberg’s personal bankruptcy proceedings, and Ronald Carmark, the purchaser of the assets of AK&C, to be the plan’s fiduciaries.

Another corporation owned and operated by Arnold Kilberg, Moneta Capital Corp., was placed into receivership on or about March 21, 2000 at the request of the Small Business Administration. Because of prior plan loan arrangements, the receiver of Moneta has come into possession of approximately $76,000 (plus earnings) belonging to the plan. The court order requires the independent fiduciaries to obtain plan money being held by the receiver, place the funds in a trust account in the name of the plan, and then distribute the plan assets (up to a total of $89,566.58) to the eligible plan participants and beneficiaries. Arnold Kilberg, who is also a plan participant, will not share in this distribution.

The Labor Department will now seek a court order to facilitate the transfer of the plan funds from the Moneta receiver to the trust account set up by independent fiduciary DiOrio. With DiOrio’s assistance, Ronald Carmark will then handle the proper distribution of the plan assets to the participants and beneficiaries.

“Our legal action demonstrates that the department is committed to doing everything in its power to protect the retirement benefits promised to workers who participate in plans such as this, even when they are abandoned by their trustees,” said Benages.

The judgment resulted from an investigation by EBSA’s Boston regional office. Employers and workers in Rhode Island can contact that office at 617.565.9600 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 Kilberg)
Civil Action Number: 06-75 ML/DLM

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

Contact Name: John M. Chavez
Phone Number: 617.565.2075