U.S. Labor Department Obtains Court Order Appointing Independent Fiduciary to Manage Mississippi Company’s Retirement Plan

Archived News Release — Caution: Information may be out of date.

Atlanta - The U.S. Labor Department has obtained a court order permanently barring bankrupt Struthers Industries, Inc., Gulfport, Mississippi, from serving in a fiduciary capacity to any employee benefit plan governed by the Employee Retirement Income Security Act (ERISA) and appointing Jeanne Barnes Bryant as the independent fiduciary of the company’s profit sharing plan.

The court order, entered in U.S. District Court for the Southern District of Mississippi, gives the independent fiduciary authority to manage the plan’s assets and take any appropriate actions.

In a lawsuit filed in January 2006, the Labor Department alleged that the company and Jomey B. Ethridge, the company's president, deducted more than $207,400 in employee contributions from payrolls but failed to remit to the plan. Struthers Industries, Inc., designed and built heat transfer and pressure vessels at its Gulfport facility. The department’s suit against Ethridge is ongoing.

The suit charges that the defendants violated their fiduciary duties under federal law when they allowed employee contributions to the plan to be used for purposes other than providing benefits; failed to segregate employee contributions from assets of the company; and failed to ensure that the plan received payroll-deducted contributions. These violations, according to the suit, occurred between November 2002 and March 2003.

“The Labor Department is committed to protecting the benefits of America’s workers and retirees,” said Howard Marsh, director of the Atlanta regional office of the Employee Benefits Security Administration (EBSA), which investigated the case. “We will not hesitate to hold accountable those who misuse workers’ retirement assets.”

Employers and workers can contact the EBSA regional office in Atlanta at 404.562.2156 or EBSA’s toll-free number, 1.866.444.EBSA (3272), for help with problems relating to private-sector pension and health plans.

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 correct violations of the law, but allows them to avoid EBSA enforcement actions and civil penalties as well as any applicable excise taxes. For more information about the VFCP, see www.dol.gov/ebsa.

In fiscal year 2006, EBSA achieved monetary results of $1.4 billion related to pension, 401(k), health and other benefits for millions of American workers and their families.

(Chao v. Struthers)
Civil Action No. 1:06CV50 LTS JMR

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