U.S. Labor Department sues to protect employee retirement assets of Southern California workers

Archived News Release — Caution: Information may be out of date.

San Francisco - The U.S. Department of Labor has sued Air Transport Manufacturing Co. of Sun Valley, California, and its president for failing to distribute funds to 15 employees from the company’s employee stock ownership plan (ESOP).

The suit, filed in the U.S. District Court for the Central District of California, alleges that the company and its president, Kirn Kessen of Glendale, California, violated the Employee Retirement Income Security Act (ERISA) by failing to make the required funds distributions to the employees. They also failed to properly administer the plan, procure annual appraisals of the company’s stock and file annual reports.

The suit seeks to remove Kessen as a fiduciary, permanently bar him from serving as a fiduciary or service provider to any plan governed by ERISA and appoint an independent fiduciary to administer the plan. In addition, the suit seeks to restore any losses to the plan that resulted from mismanagement.

Air Transport produces instrument components for light aircraft.

“The Labor Department is committed to protecting the benefits of America’s workers and retirees,” said Billy Beaver, regional director in Los Angeles for the department’s Employee Benefits Security Administration (EBSA). “Plan participants have been unable to access their funds – money they’ve counted on for their retirement. Participants reaching 70½ years of age face the additional hardship of potential IRS penalties because those responsible for administering the plan have failed to fulfill their responsibilities.”

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.

Employers and workers with questions or concerns regarding their private-sector pension and health plans can contact EBSA’s Los Angeles Regional Office at 626.229.1000 or toll-free at 1.866.444.EBSA (3272). Information is also available from the agency’s Web site at www.dol.gov/ebsa.

Chao v. Air Transport Manufacturing Co. and Kirn Kessen Employee Stock Ownership Plan
Civil Action Number CV 07 2782 GAF PLAx

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Archived News Release — Caution: Information may be out of date.