US Labor Department obtains order to restore more than $600,000 to Southern California company’s employee stock ownership plan

PASADENA, Calif. – The U.S. Department of Labor has obtained a court order restoring $601,736 to the employee stock ownership plan of defunct Air Transport Manufacturing Co. in Sun Valley, Calif. The company ceased operations and sold its assets in 2008.

The order resolves a lawsuit filed in the U.S. District Court for the Central District of California following an investigation by the Labor Department’s Employee Benefits Security Administration. The investigation into the benefit plan of the aircraft parts and equipment manufacturer found multiple violations of the Employee Retirement Income Security Act.

“The participants and beneficiaries covered by this plan were mistreated,” said EBSA Assistant Secretary Phyllis C. Borzi. “Our legal action will ensure that these workers and their families receive their rightful benefits and that the responsible fiduciary is no longer able to harm participants in this way.”

The Labor Department’s suit alleges the company and Kirn Kessen, chairman of the board and a fiduciary of the stock ownership plan, failed to properly administer the plan, make required distributions to plan participants, and procure annual appraisals of the company’s stock. During the EBSA investigation, the company made partial distributions to participants, but the shares were significantly undervalued at the time. The order excludes Kessen from distributions as a participant and permanently bars him from serving as a fiduciary to any benefit plan covered by ERISA.

Employers and workers with questions or concerns regarding their private sector pension and health plans can contact EBSA’s Pasadena office at 626-229-1000 or toll-free at 866-444-3272. Information is also available on the agency’s website at http://www.dol.gov/ebsa.

Solis v. Air Transport Manufacturing Co.
CV 07 2782 GAF

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