Labor Department settlement resolves lawsuit over mismanagement of South Carolina employee stock ownership plans

Archived News Release — Caution: Information may be out of date.

Atlanta – The U.S. Department of Labor has obtained a settlement restoring $760,000 to participants covered by the employee stock ownership plan (ESOP) of Cambar Software Inc. (CSI), in Charleston, South Carolina and requiring the payment of a civil money penalty of $76,000 by the plan officials.

Under the settlement, proof will be furnished to the Labor Department verifying that plan assets have been restored and any additional interest has been paid. The department may appoint an independent fiduciary, if necessary, to distribute the assets to participants of the CSI plan.

“The workers of Cambar Software relied on their employee stock ownership plan for their retirement,” said Bradford P. Campbell, acting assistant secretary of the Labor Department’s Employee Benefits Security Administration (EBSA). “Our action restores plan assets to pay retirement benefits.”

The Labor Department’s 2006 lawsuit alleged that Hagemeyer North America Inc., GreatBanc Trust Co., 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 Co. (C&B) and CSI.

C&B provided maintenance, repair and operating products in the electrical construction industry, and it created 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. The alleged violations occurred at the time of C&B’s merger with Hagemeyer in 2000.

The suit resulted from an investigation conducted by the Atlanta regional office of EBSA. In fiscal year 2006, the department achieved monetary results of $1.4 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 404.309.3900 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

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Archived News Release — Caution: Information may be out of date.