U.S. Labor Department obtains nearly $115,000 from bankrupt Merrimac, Massachusetts, company to pay employee health claims

Boston – The U.S. Department of Labor has obtained a settlement agreement filed with the U.S. Bankruptcy Court for the District Court of Massachusetts, providing for payment of nearly $115,000 in unpaid employee health claims of bankrupt Wolverine Proctor & Schwartz LLC, formerly of Merrimac, Massachusetts. After filing for bankruptcy, the company abandoned its employee health benefit plans, leaving 79 employees with significant unpaid health care costs.

The settlement agreement requires the bankruptcy trustee to make restitution out of Wolverine’s bankruptcy estate to the health plan funds administered by Benefit Plan Management Inc. (BPM). BPM also currently holds two bank accounts containing assets of the health plans, which the department previously took action to protect. BPM will use the $114,867 available from the bankruptcy settlement and plan accounts to pay in full the outstanding medical and dental claims of the former employees of Wolverine Proctor & Schwartz.

The company, formerly located at 51 E. Main St., manufactured commercial ovens and other equipment. On April 1, 2006, Wolverine entered into voluntary Chapter 7 bankruptcy. At the time, Wolverine had approximately 200 employees with 119 participants in the company’s self-funded health plans. Those health plans provided medical and dental benefits to the workers and their family members.

This case was investigated by the Labor Department’s Employee Benefits Security Administration (EBSA) regional office in Boston. “Even when a plan fiduciary declares bankruptcy, the department will act to recoup as much money as possible for workers who are left with unpaid medical claims,” said Alan D. Lebowitz, acting assistant secretary of EBSA. “We are pleased that the bankruptcy court affirmed the priority rights of former employees and paid in full the medical claims incurred.”

Workers and employers can contact EBSA’s Boston Regional Office at 617.565.9600 or toll-free at 866.444.3272 for help with problems relating to private sector pension and health plans. In fiscal year 2008, EBSA achieved monetary results of $1.2 billion related to pension, 401(k), health and other benefits for millions of American workers and their families. Additional information can be found at www.dol.gov/ebsa.

U.S. Bankruptcy Court v. Wolverine Procter & Schwartz
Docket Number 06-10815 JF - Chapter 7

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