U.S. Labor Department obtains judgment restoring $300,000 to Buffalo pension plans

Archived News Release — Caution: Information may be out of date.

Buffalo, New York – The U.S. Department of Labor has obtained a consent judgment requiring the former trustees of Buffalo Color Corp.’s two pension plans to pay $300,000 to the Pension Benefit Guaranty Corp. as the plans’ new trustee.

“The Labor Department is committed to protecting the benefits of America’s workers and retirees,” said Bradford P. Campbell, acting assistant secretary of the Labor Department’s Employee Benefits Security Administration (EBSA). “We will not hesitate to act when plan fiduciaries fail to act in the best interests of plan participants and beneficiaries.”

The department sued the plans’ former trustees for allegedly violating the Employee Retirement Income Security Act (ERISA) when they used pension assets to purchase corporate notes from Buffalo Color Corp.’s parent company, Lanesborough Corp., that later became worthless. The trustees allegedly voted twice in December 2000 to allow the pension plans to buy the corporate notes despite Lanesborough Corp. having filed for Chapter 11 bankruptcy on September 29, 2000.

The lawsuit named as defendants former trustees Kenneth Funsten, Armen Dekmejian, Lawrence Kaminski, Michael Lindaman, Frank Giumpa, Lawrence Zollinger and Frank Miller. The defendants also served as members of the plans’ pension committee. On October 15, 2004, the Pension Benefit Guaranty Corp. assumed responsibility as trustee of the plans.

The judgment, entered in the U.S. District Court for the Western District of New York, resulted from an investigation conducted by EBSA’s Boston Regional Office. In fiscal year 2006, EBSA achieved record monetary results of $1.4 billion related to the pension, 401(k), health and other benefits for millions of American workers and their families.

Employers and workers can contact EBSA’s Boston Regional Office at 617.565.9600 or toll-free at 1.866.444.EBSA (3272), for more information on ERISA’s requirements or for help with problems relating to private sector pension and health plans. Additional information can be found at www.dol.gov/ebsa.

Chao v. Funsten
Civil Action Number 1:05-CV-00752-JTE

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Archived News Release — Caution: Information may be out of date.