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Benefits April 14, 2008
Defunct Firm Forces 401(k) Distributions
April 14, 2008 (PLANSPONSOR.com) - Former employees
engaged in a lawsuit against their defunct former employer
Wurld Media Inc. were surprised last month when they received
lump-sum distributions of their 401(k) accounts.
Reported by Rebecca Moore
The Albany Times Union reports that the former employees received a letter with their checks saying the distribution was ordered by ex-CEO Gregory Kerber, the trustee of the retirement plan. The former employees are suing Wurld Media and successor company ROO Group Inc., claiming contributions to their 401(k) were withheld from their paychecks but never deposited to their accounts.
The letter plan participants received said: “At the direction of the trustee, your mutual funds were liquidated and a lump-sum distribution processed, with any applicable federal income tax withholding applied,” according to the Times Union. Richard Wendling, the Saratoga County assistant district attorney who is handing a criminal case against Kerber and another Wurld Media executive, Richard Saxton, said he is aware of the notification employees received, and his office is looking into it with the plan administrator.
After the online music- and video-sharing software company’s assets were sold for $4.3 million to ROO Group, Kerber and Saxton were indicted in November on various charges relating to the sale and allegations of improper tax and payroll accounting. Kerber’s attorney said the retirement plan liquidation has no effect on the criminal case.