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Release Date: 10/05/2001
Release
Number: 01-100
Contact Name: Gloria Della
Phone Number: 202.219.8921 |
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Dallas, Texas - The owners of defunct
Texas-based Celeste Healthcare Services Inc. must waive their rights to
benefits from the company’s pension plan to offset $289,524 in losses
suffered as a result of prohibited loans made by the plan to the company and
its affiliate, according to consent judgments obtained October 3, 2001, by the U.S. Department of Labor. |
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Under the judgments, defendants Michael C. Grady,
Barbara Powell Grady, Celeste Healthcare Services Inc. and C&C Healthcare
Services Inc. acknowledge that as fiduciaries to the pension plan they caused
$289,524 in financial losses to the plan. The judgments bar the defendants from
serving in positions of trust to any plan governed by the Employee Retirement
Income Security Act (ERISA). |
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Michael Grady and his wife Barbara Grady were
members of the board of directors of Celeste Healthcare Services. Both
companies have gone out of business. Celeste Healthcare Services was a home
health care agency operating in three locations in Texas: Bay City, Mount
Bellview and Liberty. The company sponsored the employee stock ownership plan
for as many as 94 participants. At the end of 1999, the plan held $238 in
assets. |
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A suit filed February 28, 2001, alleged that the
defendants violated ERISA by making $215,000 in unsecured loans from the plan
to Celeste Healthcare Services and C&C Healthcare Services between 1996 and
1997. The loans were never repaid to the plan. |
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“The department is committed to protect the
hard-earned benefits promised of workers," said Roger Hilburn, acting director
of PWBA’s Dallas Regional Office. “Employers and workers can reach us
at 214.767.6831 for help with any problems relating to private-sector pension
and health plans.” |
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This lawsuit resulted from an investigation
conducted by the Dallas Regional Office of the Labor Department’s Pension
and Welfare Benefits Administration into alleged violations of ERISA. The
judgments were entered in federal district court in Austin, Texas. |
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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 202.693.7775. |
