US Department of Labor files suit seeking removal of trustees and appointment of independent fiduciary for employee benefit plan in Minnesota

Date of Action: Jan. 12, 2015

Type of Action: Complaint

Name of Defendant: Kenneth W. Wright, E. Paul Willingham, and SchoolStart Company 401(k) P/S Plan

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

SchoolStart Company 401(k) P/S Plan was established in 2004 by SchoolStart Company, an Eden Prairie, Minnesota nonprofit corporation. SchoolStart ceased operations approximately Jan. 1, 2008.  When SchoolStart ceased operations, Kenneth W. Wright, , and E. Paul Willingham, were the plan’s trustees, and failed to ensure that the funds in the profit sharing plan were appropriately distributed to participants.  As a result of Wright’s and Willingham’s failure to administer the plan after SchoolStart ceased operations, they effectively abandoned the plan.  The plan currently has approximately four participants and assets of approximately $18,700, which are held by MG Trust. 

Resolution: The Department is asking the court to remove Wright and Willingham as plan trustees and to appoint an independent fiduciary at Wright’s and Willingham’s expense to arrange for the termination of the plan and distribution of its assets. Furthermore, the department seeks to enjoin Wright and Willingham from engaging in any further action in violation of Title I of ERISA and from serving as fiduciaries or service providers to any ERISA-covered plan.

Court: United States District Court for the District of Minnesota.

Docket Number: 0-15-cv-00060-ADM-FLN

Employers and workers can reach EBSA toll-free at 866-444-3272 for help with problems related to private sector retirement and health plans.  Additional information can be found at www.dol.gov/ebsa.

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