Search Form
First, enter a politician or zip code
Now, choose a category

Public Statements

US Labor Department Sues to Restore More than $34 Million to 2 Worker Pension Funds of Michigan-Based Vehicle Parts Manufacturer

Press Release

By:
Date:
Location: Washington, DC

The U.S. Department of Labor has sued to restore more than $34 million in assets to two retirement funds of Michigan-based vehicle parts manufacturer Metavation LLC that allegedly were used in violation of the Employee Retirement Income Security Act.

The department named in its lawsuit George Hofmeister, chairman and director of Metavation, and Bernard Tew, managing director of Tew Enterprises LLC and Bluegrass Investment Management LLC. The latter two companies acted as investment advisers to the two plans. The suit also names Metavation LLC, a subsidiary of Lexington, Ky.-based Revstone Industries LLC.

"Retirees who rely on pension plans should not have to worry about whether these funds are secure," said Secretary of Labor Hilda L. Solis. "That is why those who are entrusted with managing pension funds are held to the highest legal standards and will be held accountable by the Labor Department if they violate that trust."

In 2008, Revstone subsidiary Cerion LLC acquired Metavation LLC, formerly Hillsdale Automotive, and took control of the pension plans. The suit, filed in the U.S. District Court for the Eastern District of Kentucky, is based on the results of an investigation by the Labor Department's Employee Benefits Security Administration that found numerous ERISA violations beginning in February 2009, just three months after Hillsdale had been acquired.

The violations include prohibited loans to related companies within the Revstone Industries corporate family, prohibited use of plan assets for the purchase and lease of employer property, prohibited purchase of customer notes from companies within Revstone Industries, prohibited purchase of investments from adverse parties, payment of excessive fees to services providers, and the improper allocation of income and expense payments between the pension plans. The suit alleges that, as a result of the defendants engaging in these prohibited transactions, approximately $12.1 million from the Hillsdale Salaried Pension Plan and approximately $22.5 million from the Hillsdale Hourly Pension Plan were improperly used.

Together, the plans report having assets now valued at approximately $36 million. As of November 2010, there were 367 participants in the salaried plan and 1,161 participants in the hourly plan, the latest data available.

"The Department of Labor is committed to protecting the assets of workers' pension plans from misuse by plan fiduciaries and service providers," said Assistant Secretary of Labor for Employee Benefits Security Phyllis C. Borzi. "These workers are relying on their money being there for them when they retire. Our aim is to make this situation right."

The department's suit asks the court to order the defendants to correct all prohibited transactions related to the loans and use of plan assets, restore any losses to the plans (including interest) resulting from fiduciary breaches and transfer to the plans all gains resulting from their ERISA violations. The suit also asks the court to remove the defendants as fiduciaries of the plans and prohibit them from serving as fiduciaries or service providers in the future to any plan covered by ERISA. Finally, the suit seeks the appointment of an independent fiduciary to administer the plans.

Revstone Industries LLC designs, engineers and manufactures components for use in the transportation and heavy truck industries. Revstone Industries wholly owns Cerion LLC, which wholly owns Metavation LLC. George Hofmeister also is the chairman of Revstone Industries.

This case was investigated by EBSA's Cincinnati Regional Office. It is being litigated by the department's Chicago Regional Office of the Solicitor. Employers and workers can contact EBSA's Cincinnati office at 859-578-4680 or toll-free at 866-444-3272 for help with problems relating to private sector retirement and health plans. For more information, visit http://www.dol.gov/ebsa/.

Solis v. George Hofmeister et al.
Civil Action File Number 5:12-cv-00250-KKC


Source:
Skip to top
Back to top