U.S. Labor Department sues defunct Windjammer Barefoot Cruises to restore losses to 401(k) plan participants and beneficiaries

MIAMI - The U.S. Department of Labor has sued Windjammer Barefoot Cruises Ltd. and its fiduciaries to restore $24,655.77 to the company's 401(k) retirement plan for the benefit of plan participants and beneficiaries. Windjammer Barefoot Cruises provided leisure cruises until 2007 and was based in Miami Beach, Fla.

The lawsuit follows an investigation by the department's Employee Benefits Security Administration into alleged violations of the Employee Retirement Income Security Act.

According to the suit, the defendants allegedly withheld $19,190.70 in employee contributions owed to the 401(k) plan in 2006 and 2007, but failed to forward the contributions to the plan. The defendants also allegedly withheld $4,696.99 in employee loan payments that were never forwarded to the plan. In addition, the defendants' failures to forward the assets in a timely manner resulted in at least $778.08 in lost earnings and opportunity costs through September 2009.

"The company's financial difficulties do not justify the defendants taking money that employees meant for their retirement and using it for the benefit of the company," said R.C. Marshall, EBSA's regional director in Atlanta, Ga.

Filed in the U.S. District Court for the Southern District of Florida-Miami Division, the suit names the corporation; Daniel Walsh, vice-president of Windjammer Barefoot Cruises; Stephen Pallister, protector of the 1999 Burke Trust; and David Harris, director of Bujika Ltd. and the trustee of the trust. The 1999 Burke Trust owns Windjammer Barefoot Adventures Ltd., the holding company that owns 100 percent of Windjammer shares.

The suit asks the court to order the defendants to restore to the plan all losses with interest and opportunity costs, correct all prohibited transactions and return any plan funds to which the defendants were unjustly enriched. The suit also asks that the plan offset individual plan accounts of the defendants against plan losses, remove them as fiduciaries to the plan, permanently bar them from serving as fiduciaries of any plan subject to ERISA and appoint an independent fiduciary at the defendants' expense to manage the plan and, if necessary, terminate it.

This case is part of EBSA's employee contribution project to safeguard workers' contributions to 401(k) and health benefit plans. Employers and workers can reach EBSA's Atlanta Regional Office at 404.302.3900 or toll-free at 866.444.3272 for help with problems relating to private sector retirement and health plans. Additional information can be found at http://www.dol.gov/ebsa.

Solis v. Daniel P. Walsh

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