US Labor Department files suit seeking removal of trustee and appointment of independent fiduciary for abandoned New York City 401(k) plan

Date of Action: Dec. 23, 2014

Type of Action: Complaint

Names of Defendants: Mattie Kon and Blitz Systems Inc. 401(k) Plan.

An investigation by the U.S. Department of Labor’s Employee Benefits Security Administration resulted in the department filing a suit in federal court alleging violations of the Employee Retirement Income Security Act:

Allegations: The Blitz Systems Inc. 401(k) Plan was established in October 1997 as a pension benefit plan for employees of Blitz Systems Inc. in New York City. Matti Kon has served as sole trustee and sole fiduciary for the plan and is the only individual with signatory authority and responsibility for administering the plan and distributing its assets. Matti Kon stopped performing his fiduciary duties in June 2003 when the company ceased operations. He did not ensure the appointment of a new fiduciary to manage the plan or oversee distribution of its assets. Without a duly appointed trustee or other fiduciary of the plan, the plan’s 10 remaining participants cannot access their assets.

Resolution: The Labor Department is asking the court to: remove Matti Kon as plan trustee; appoint an independent trustee and fiduciary to administer the plan and distribute its assets to its participants and their beneficiaries; order that any expenses associated with the appointment of the fiduciary and subsequent plan administration and termination be charged to Kon; and require the offset of benefits due to Kon under the plan against the amount Kon owes the plan including expenses associated with the appointment of the independent fiduciary.

Court: U.S. District Court for the Southern District of New York

Docket Number: 14-CV-10085

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