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 transactions.
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.