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Compliance June 27, 2006
DoL Seeks Restoration for ESOP Plan of SC Company
June 27, 2006 (PLANSPONSOR.com) - The Department of
Labor (DoL) has brought a lawsuit against Hagemeyer North
America Inc. in South Carolina, claiming participants
suffered more than $1 million in losses when the company's
employee stock ownership plan (ESOP) purchased shares at
inflated prices.
Reported by Rebecca Moore
According to the DoL announcement, the US District Court for the District of South Carolina has combined its suit with a private suit brought by employees of Cameron & Barkley Company, now part of Hagemeyer.
The combined suit alleges that Hagemeyer North America Inc., GreatBanc Trust Company and members of the plan’s administrative and advisory committees violated the Employee Retirement Income Security Act (ERISA) by mismanaging two ESOPs sponsored by the Cameron & Barkley and Cambar Software Inc.
The alleged violations to the ESOP occurred when Cameron & Barkley merged with Hagemeyer in 2000, the announcement said. Cambar Software was not part of the merger, and its employees’ ESOP accounts were spun off into a new ESOP.
The DoL is seeking a court order requiring the defendants to restore to the plan all losses with interest, return any illegal profits received by them and undo any transactions prohibited by federal benefits law. The suit also asks that there be an accounting of the escrow monies and appropriate allocation of funds with interest to the Cameron & Barkley and Cambar Software ESOPs.
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