Perez v. Andrew C. Rodabaugh and A.R.E. Machine Products Inc. involving unremitted employee contributions

Date of Action: Nov. 18, 2013

Type of Action: Simultaneous Complaint and Consent Order

Names of Defendants: Andrew C. Rodabaugh, A.R.E. Machine Products Inc. and the A.R.E. Machine Products Inc. 401(k) Retirement Plan located in Louisville, Ky.

Allegations: Andrew C. Rodabaugh and A.R.E. Machine Products Inc., as fiduciaries to the company’s 401(k) retirement plan, failed to ensure that employee contributions withheld for pay periods Oct. 29, 2010 and Dec. 3, 2010 through Oct. 21, 2011, were remitted to the plan. The contributions were retained in the general assets of the company. They also failed to ensure timely remittance of employee contributions to the plan for the Oct. 15, 2010 payroll.

Resolution: On Dec. 20, 2012, the Department of Labor filed an adversarial proceeding in Rodabaugh’s Chapter 7 bankruptcy regarding the unremitted employee contributions to the plan, and on June 19, 2013 a stipulation regarding non-discharge ability of debt was filed with the court. On Nov. 18, 2013, a simultaneous complaint and consent order was entered by the court in which the parties agreed that Rodabaugh and the company are jointly and severally liable for unremitted employee contributions and lost opportunity costs owed to participants in the plan. The defendants agreed to pay $11,969.42 to the plan representing $11,075.27 in unremitted employee contributions and $894.15 in lost opportunity costs within 30 days of the entry of the consent judgment and order. Rodabaugh and the company are to terminate the plan and cause the distribution of the plan’s assets to the participants and file all appropriate documents with government agencies. Subsequent to the termination of the plan, the defendants are permanently enjoined and restrained from violating provisions of Title I of the Employee Retirement Income Security Act.

Court: United States District Court for the Western District of Kentucky

Docket Number: 3:13-cv-01122-JGH

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