DOL Sues Shuttered Law Firm Over Participant’s Assets

The Department of Labor sued the retirement plan of defunct law firm McCullough, Campbell & Lane LLP and four of the firm’s capital partners on November 20 for allegedly failing to terminate the company retirement plan, which holds $5.4 million in assets.

In 2019, the four capital partners—Paul S. Turner, John W. McCullough, Dennis Nelson and David L Joslyn—entered into a partnership resolution to terminate the plan and appointed Turner as plan administrator with authority to terminate the plan, the complaint alleges.

The DOL, in the name of Acting Secretary of Labor Julie Su, sued the Chicago-based law firm in U.S. District Court for the Northern District of Illinois’ Eastern Division, claiming two breaches of fiduciary duty to participants. In Su v. Turner et al., Turner faces one allegation for failing to follow governing documents of the plan regarding properly terminating the plan and distributing plan assets, and the remaining capital partners face another allegation, for their failure to monitor Turner’s termination of the plan and distribution of its assets.

The complaint alleges that Turner, on October 31, 2019, signed a Transamerica Retirement Solutions LLC signature authorization form, permitting Turner to approve changes to plan level services and participant requests, which included but was not limited to approving participant transaction requests, plan level fund changes, plan design changes and changes to administrative services.

“Since 2019, Defendant Turner has failed to administer the Plan and its assets,” the complaint states. “By Defendant Turner failing to administer the Plan, participants of the Plan have not been able to obtain distributions from the Plan of their individual account balances.”

According to Transamerica’s basic plan document, if the employer ceases to operate or exist, the plan was to terminate in accordance with the Internal Revenue Code and the Employee Retirement Income Security Act. Transamerica Retirement Solutions LLC is the plan’s asset custodian and recordkeeper. Distributions were to have started, at the latest, within 60 days of the plan year in which employment was severed.

Although McCullough, Campbell & Lane ceased to operate by September 2019, another firm is currently operating as an active business under the law firm name McCullough PC, according to information on McCullough PC’s website.

“McCullough P.C. is a successor entity to the law firm of McCullough, Campbell & Lane LLP, which was formed in 1987,” the firm’s website states.

Representatives for McCullough, Campbell & Lane LLP did not respond to a request for comment.