August 20, 2012
--- The U.S. Department of Labor (DOL) is suing to restore $34.6 million in assets
to two pension funds for employees of auto supplier Metavation. ---
The lawsuit claims Metavation LLC
improperly used the funds in violation of the Employee Retirement Income
Security Act (ERISA).
According to The Detroit News, the suit, filed in the U.S. District
Court in Kentucky, follows a government investigation that found numerous
violations beginning in February 2009, just three months after Metavation,
formerly Hillside Automotive, had been acquired by Revstone subsidiary Cerion
LLC. The DOL said the firms loaned funds to related companies within the
Revstone Industries corporate family, and made other improper
The lawsuit says about $12.1 million
from the Hillsdale Salaried Pension Plan and approximately $22.5 million from
the Hillsdale Hourly Pension Plan were improperly used.
In addition to Metavation, the lawsuit
names as defendants George Hofmeister, chairman and director of Metavation, and
Bernard Tew, managing director of Tew Enterprises LLC and Bluegrass Investment
Management LLC, two companies that acted as investment advisers to the two
plans, the news report said.
The DOL seeks an order forcing the
firms to correct all prohibited transactions, restore losses to the plans including
interest and transfer to the plans all gains resulting from their violations.
The suit also asks the court to remove the defendants as responsible for the
plans, prohibit them from serving as fiduciaries or service providers in the
future, and to appoint an independent fiduciary to administer the plans.