US Labor Department investigation results in former Alabama computer device maker being ordered to restore more than $114,000 to pension plan

MONTGOMERY, Ala. – A federal court has removed Amtren Corp. and former president Charles Kirk Lamberth as fiduciaries from the Amtren Corp. Profit Sharing Plan and ordered them to restore $114,255 to the defunct company’s pension plan after an investigation by the U.S. Department of Labor’s Employee Benefits Security Administration found evidence of an improper loan that violated provisions of the Employee Retirement Income Security Act.

In June, the Labor Department filed a lawsuit in the U.S. District Court for the Middle District of Alabama, Northern Division, based on EBSA’s investigation. The investigation found that the defendants caused the retirement plan to transfer the majority of its assets to the company, allegedly as a loan, which exposed the plan to the risk of large losses by not diversifying its assets. The defendants failed to execute any loan documents for the loan, failed to require the company to provide security or a promissory note for the loan and never ensured that the company make any loan repayments or interest payments to the plan. Amtren, which manufactured computer-related devices, was based in Montgomery and ceased operations during or around late 2006.

“The Labor Department will not allow fiduciaries to act recklessly with participants’ retirement funds,” said Isabel Colon, EBSA’s regional director in Atlanta. “By law, fiduciaries must act solely in the best interests of plan participants, which clearly was not the case in this instance.”

The court has ordered that the defendants be permanently barred from acting as fiduciaries of any employee benefit plan subject to ERISA. Any participant interest held by Lamberth in existing or future assets of the plan will be applied as an offset against the amount due the plan. Jeanne Bryant has been appointed as successor fiduciary. Her expenses will be paid from the assets of the plan, and the defendants will be held liable for reimbursing the plan for those expenses.

In a related action, Merrill Lynch, Pierce, Fenner & Smith Inc. has agreed to restore assets to the Amtren plan following allegations by EBSA that one of its investment advisors, Gilbert Meadows III, failed to take action to protect the plan from the prohibited transaction initiated by the defendants.

This case was investigated by EBSA’s Atlanta Regional Office. It was litigated by the Labor Department’s Regional Office of the Solicitor in Atlanta. Employers and workers can contact EBSA at 404-302-3900 or toll-free at 866-444-3272 for help with problems relating to private sector retirement and health plans. For more information, visit www.dol.gov/ebsa.

Solis v. AMTREN Corp.
Civil Action File Number 2:11-cv-00460-MHT-WC

U.S. Department of Labor news materials are accessible at www.dol.gov. The information above is available in large print, Braille, audio tape or disc from the COAST office upon request by calling 202-693-7828 or TTY 202-693-7755.