In Oregon, Bankrupt Company Sued To Protect Retirement Benefits For Employees

Portland, Oregon - The U.S. Department of Labor has sued William Patterson and C. Dixon Rauch, former owners and officers of defunct Rundel Products Inc., Portland, Oregon, in federal district court in Portland to recover over $15,000 in retirement plan losses resulting from violation of the Employee Retirement Income Security Act (ERISA).

Between August 15, 2001, and January 2002, the defendants failed to transfer to the retirement plan $15,000 in contributions withheld from employees’ pay. Instead, the money was co-mingled with the company’s general assets. The company ceased business shortly thereafter and was placed into bankruptcy March 12, 2002.

“The misuse of pension assets to subsidize corporate activities jeopardizes the retirement income of workers and will not be tolerated,” said Francis C. Clisham, regional director of the department’s Employee Benefits Security Administration (EBSA) in San Francisco.

The suit asks the court to bar Patterson and Rauch from serving as fiduciaries or service providers to any employee benefit plan covered by ERISA and to appoint an independent fiduciary to terminate the plan and distribute plan assets to eligible participants.

The suit resulted from an investigation conducted by EBSA’s Seattle District Office. In fiscal year 2005, EBSA achieved monetary results of $1.7 billion related to pension, 401(k), health and other benefits for millions of American workers and their families.