Perez v. Burgess Baird Jr. involving prohibited loans and investments made by DSI Contracting Inc.’s profit sharing retirement plan in Austell, Ga.

Date of Action: Feb. 3, 2014

Type of Action: Complaint

Name(s) of Defendant(s): Burgess Baird Jr. and DSI Contracting Inc.

Allegations: On March 1, 1980, DSI Contracting Inc., a defunct company formerly based in Lilburn, Ga., established a profit sharing retirement plan for its employees. During the course of an investigation by the U.S. Department of Labor’s Employee Benefits Security Administration, the agency found that Burgess Baird Jr., failed in his fiduciary responsibility to the plan and committed numerous prohibited transactions by causing the plan to purchase real estate contiguous to property DSI was developing. The property being developed was called Stonebrook subdivision and was located in Austell, Ga. Baird also issued loans to participants in amounts that exceeded the amounts allowed under the terms of the plan document. The proceeds of the participant loans were used to invest in Stonebrook. Baird also issued a $490,000 loan from the plan to a real estate company, called Burge Realty LLC, which in turn, used the proceeds of the loan to by ten lots in the Stonebrook development. Finally, Baird failed to attempt to collect on the participant loans or the loan to Burge Realty, resulting in large losses to the plan.

Resolution: The department is asking the court to order the defendants to restore all losses, including interest or lost opportunity costs to the plan, which occurred as a result of the defendant’s breach of their fiduciary obligations; to reverse each prohibited transaction; to permanently enjoin the defendants from serving as fiduciary, administrator, officer, trustee, custodian, agent, employee, representative, or having control over the assets of any employee benefit plan subject to the Employee Retirement Income Security Act, and to appoint a successor fiduciary at defendant Baird’s expense.

Court: United States District Court, for the Northern District of Georgia, Atlanta Division.

Docket Number: 1:14-cv-00282-CAP

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