Showing posts with label GARMENT COMPANIES. Show all posts
Showing posts with label GARMENT COMPANIES. Show all posts

Wednesday, July 31, 2013

PENSION PLAN TRUSTEE AGREES TO RESTORE ASSET SHORTFALLS

FROM:  U.S. DEPARTMENT OF LABOR 

Trustee of defunct New York City garment companies’ pension plans settles US Labor Department suit alleging misuse of more than $4.2 million in plan assets

Colette Mordo agrees to restore asset shortfalls; is permanently barred as fiduciary

NEW YORK — The U.S. Department of Labor has obtained a consent judgment in federal court in which the trustee of two defined benefit pension plans admits to entering into $4,232,915 in alleged unlawful plan transactions between 2002 and 2010. Colette Mordo, trustee and fiduciary to the pension plans of the Manhattan-based Sadimara Knitwear Inc. and the Stallion Knits Ltd. pension plans also agrees to restore, up to that amount, any shortfall in assets owed to the plans' participants and beneficiaries.

The judgment resolves a lawsuit filed in the U.S. District Court for the Southern District of New York alleging that Mordo violated her fiduciary duties under ERISA. The lawsuit alleged that Mordo authorized the pension plans to make improper loans and transfers of plan assets over several years to multiple recipients, including members of the Mordo family and International Design Concepts LLC and Apparel Group International LLC, two companies in which Mordo had an ownership interest.

"If you've been entrusted with the assets of an employee benefit plan, it's illegal to enrich yourself or your family at the plan's expense," said Assistant Secretary of Labor for Employee Benefits Security Phyllis C. Borzi. "That's not just common sense; it's the law, and the Labor Department will not hesitate to investigate and pursue appropriate legal remedies whenever fiduciaries fail to meet this standard."

The judgment removes Mordo from any and all fiduciary positions with respect to the plans and permanently bars her from serving as a fiduciary to any ERISA-covered plan. It also appoints David M. Lipkin of Metro Benefits Inc. as the independent fiduciary who will administer the plans, determine and pay out benefits to participants, and terminate the plans. The Labor Department is authorized to seek a contempt order should Mordo violate any terms of the judgment.


Sadimara Knitwear Inc. and Stallion Knits Ltd. were garment companies headquartered in Manhattan. The companies, which are no longer in operation, sponsored the plans to provide pension benefits to their employees.

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