Feds sue pipeline firm, say pension plan abandoned
The U.S. Department of Labor filed suit in federal court Thursday against the former owner of a Fruita company that went out of business without paying some of its bills.
The lawsuit was filed in U.S. District Court in Denver and alleges Carl N. France, president and owner of IXP Inc., a pipeline-construction company that ceased operations in January 2009, abandoned his company’s pension plan.
Steve Eischen, director of the Labor Department’s Employee Benefits Security Administration’s regional office in Kansas City, said the suit alleges France violated the U.S. Employee Retirement Income Security Act when he failed to administer the company’s 401(k) plan properly.
As a result, he deprived 21 of his employees of their retirement benefits, he said.
“When an employee benefit plan is abandoned, so are the workers who invested in it,” Eischen said. “We took this legal action so the plan will be properly managed and its participants can access the funds that rightly belong to them.”
The department is asking a federal judge to appoint an independent fiduciary agent to terminate the company’s former plan and distribute its remaining assets to the workers. As of September 2009, that totaled more than $104 million, Eischen said.
Last year, several former suppliers of the company complained that it went out of business owing them millions of dollars. Subcontractors in Colorado, Utah and Wyoming filed lawsuits against IXP, claiming more than $2.6 million in unpaid bills.
Federal tax records also showed IXP owed nearly $6 million in payroll and heavy-trucking-equipment taxes from 2007 and 2008.