DOL sues to recover more Revstone pension plan assets

The Department of Labor is suing pension trustees of two subsidiaries of Revstone Industries LLC and an investment adviser to recover $4.9 million in defined benefit plan assets that the agency claims were misused.

The suits are related to lawsuits filed in August against Metavation LLC, Revstone subsidiary and a Southfield, Mich., vehicle parts manufacturer, which are seeking recovery of $34 million in plan assets.

The latest lawsuits, filed May 30 also in U.S. District Court in Lexington, Ky., allege similar fiduciary breaches in the defined benefit plans of Fairfield, Iowa-based foundry Fairfield Castings LLC and Madison Heights, Mich.-based manufacturer Fourslides Inc.

The 2012 lawsuits involved two Metavation plans, Hillsdale Salaried Pension Plan and Hillsdale Hourly Pension Plan, in Lexington, Ky. The Pension Benefit Guaranty Corp. announced in March it would assume responsibility for both plans.

The Labor Department's Employee Benefits Security Administration began investigating the Hillsdale plans in February 2009, after Hillsdale Automotive was acquired by Revstone subsidiary Cerion and the name was changed to Metavation.

All of the lawsuits name Revstone Industries chairman George Hofmeister and investment adviser Bernard Tew, who is managing director of Tew Enterprises and Bluegrass Investment Management.

On Monday, Department of Labor attorneys asked the court to consolidate the cases, arguing “virtually identical fiduciary misconduct by Hofmeister, Tew and others,” according to court documents.

Fairfield Casting and Fourslides are owned by irrevocable trusts of Mr. Hofmeister's children. Mr. Hofmeister is chairman of both Fairfield Castings and Fourslides. The Fairfield Casting and Fourslides lawsuits allege that Mr. Hofmeister and other plan trustees engaged in a series of prohibited transactions, including improper use of funds for real estate purchases and loans to interested parties.

The lawsuits are asking for appointment of an independent fiduciary for the plans and an order to prohibit the defendants from serving as fiduciaries or service providers to any ERISA-covered plan.

Calls to Revstone Industries and the law firms representing the defendants, Graydon Head & Ritchey in Cincinnati and Seward & Kissel in New York, were not returned at press time.

When the Metavation lawsuits were filed, Revstone denied the allegations in a statement that acknowledged some deficient transactions affecting less than 10% of plan assets that the company reported to EBSA.