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Release Date: 09/27/2002
Release Number: V-340
Contact Name: Sharon Morrissey
Phone Number: 202.693.8664
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Chicago, Illinois - The U.S. Department of Labor filed two lawsuits against the
trustee of the profit sharing plan of Birger Nyborg and Co., Ltd. of Roselle,
Illinois for failing to forward contributions withheld from employees’ paychecks
and to prohibit the trustee from discharging debts owed to the plan in personal
bankruptcy proceedings. |
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The department filed civil and bankruptcy lawsuits in Chicago on
September 16,
2002, alleging that Nyborg commingled employee contributions owed to the plan
with the company’s general assets and used the plan’s assets to pay the
operating expenses of the company from July 1994 to December 1997. |
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The civil suit asks the court to require Nyborg
to restore all losses with interest, to replace him with an independent
fiduciary to administer the plan and to permanently bar Nyborg from serving in a
trust position to any plan governed by the Employee Retirement Income Security
Act (ERISA). In the suit filed with the bankruptcy court, the department is
seeking to prevent Nyborg from discharging debts owed the plan as a result of
his own personal Chapter 11 bankruptcy. The investigation was conducted by
the department’s Chicago Regional Office of the Pension and Welfare Benefits
Administration (EBSA). |
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The Birger Nyborg profit sharing plan was established in 1986 to provide
benefits to the company’s employees upon retirement, death or disability.
The plan had $305,385.08 in assets and 4 participants as of December 31, 2001. |
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Kenneth Bazar, director of EBSA’s Chicago Office, noted that employers with
similar problems, who are not yet the subject of an investigation by EBSA, may
be eligible to participate in the Department's Voluntary Fiduciary Correction
Program (VFCP). Participation in the VFCP requires employers to make workers
whole but allows them to avoid EBSA enforcement actions and civil penalties as
well as any applicable excise taxes. "The VFCP gives plan
sponsors a way to come into compliance with ERISA by restoring workers' benefits
while avoiding an investigation by EBSA,” said Bazar. “It protects
workers' health and retirement benefits and allows us to focus our resources on
those who seek to avoid compliance." For more information about the VFCP,
see www.dol.gov/ebsa. |
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Employers and workers can contact the Chicago Regional Office at
1.312.353.0900 or EBSA’s Toll-Free Employee & Employer Hotline number,
1.866.275.7922, for help with any
problems relating to private-sector pension and health plans. |
(Chao v. Birger Nyborg & Co., Ltd. and
Chao v. Birger Nyborg
Civil Action No. CV-02C-6567
Adversary # 02A01302)
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U.S. Department of Labor
news releases are accessible on the Internet. The information in this news
release will be made available in alternate format upon request (large
print, Braille, audio tape or disc) from the Central Office for Assistive
Services and Technology. Please specify which news release when placing
your request. Call 202.693.7773 or TTY 202.693.7755. |
