Former owner of BB Kids stores in Massachusetts agrees to restore employee contributions to SIMPLE IRA plan to resolve U.S. Labor Department lawsuit

Boston – Robert Kjellman, former owner of bankrupt Massachusetts children’s furniture store chain BB Kids LLC, has agreed to restore $14,212 to the company’s savings incentive match plan for employees individual retirement account (SIMPLE IRA) to settle a lawsuit filed by the U.S. Department of Labor alleging violations of the Employee Retirement Income Security Act (ERISA).

The suit, filed in the U.S. District Court for the District of Massachusetts, alleged that Kjellman failed to make sure that employee contributions withheld from employee paychecks between January 1, 2005, and February 16, 2006, were properly forwarded to the plan. On the latter date, BB Kids LLC filed for bankruptcy.

The company was the sponsor and administrator of the SIMPLE IRA plan established through AIM Investment Services Inc. of Houston, Texas, on January 1, 2005, to provide retirement benefits to employees of BB Kids LLC. Kjellman had sole discretionary control over the funds withheld from the salaries of plan participants. The Labor Department’s Employee Benefits Security Administration’s (EBSA) Boston Regional Office, which investigated the case, enforces ERISA requirements to protect private sector employee benefit plans.

“These employees counted on this money to pay their future retirement benefits,” said Jean Ackerman, EBSA’s regional director in Boston. “The defendant in this case violated his fiduciary duty by failing to ensure that funds withheld from employee paychecks were properly forwarded to the plan.”

A consent judgment obtained by the department orders Kjellman to pay restitution to the plan and to distribute to participants their shares of any restitution. He also will be barred from serving as a trustee or administrator with respect to any ERISA-covered plan for a period of five years.

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.

Secretary of Labor v. Robert Kjellman
Civil Action Number: 1:09-CV-10133

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