A U.S. District Court judge removed Metavation LLC Chairman George Hofmeister and investment adviser Bernard Tew as defined benefit plan trustees July 26.
The decision by Judge Karen Caldwell in Lexington of the Eastern District of Kentucky in a civil action brought by the Department of Labor, also bars Mr. Hofmeister and any of his companies from touching the assets of several defined benefit plans that both the DOL and the Pension Benefit Guaranty Corp. have been fighting to protect as Metavation and its parent company, Revstone Industries LLC, go through Chapter 11 bankruptcy proceedings.
Ms. Caldwell appointed Washington-based Fiduciary Counselors Inc. to serve as the plans' independent fiduciary and plan administrator. Laura Rosenberg, Fiduciary Counselors senior vice president, said in an interview that the firm “was pleased to be appointed … in order to protect the interests of the plans and their participants and beneficiaries.”
The judge's order also authorizes Fiduciary Counselors to review plan expenses, holding out the possibility that Messrs. Hofmeister and Tew “may ultimately be held liable” for non-routine expenses. DOL officials estimate Mr. Tew collected more than $2 million in investment consulting fees for Metavation plans.
DOL officials sued Messrs. Hofmeister and Tew last August to recover $34 million in pension assets from Southfield, Mich.-based Metavation's Hillsdale Hourly Pension Plan and Hillsdale Salaried Pension Plan. A second lawsuit this May is seeking to restore $4.9 million to the pension plans for Revstone subsidiaries Fairfield Casting LLC and Fourslides Inc. The subsidiaries named in the DOL lawsuits are owned by irrevocable trusts in the name of Mr. Hofmeister's children. In a 2012 statement, Revstone acknowledged reporting deficient transactions involving less than 10% of plan assets, and said the plans' investment strategy “has been executed in the best interests of both the plan and its participants.”
In March, the PBGC moved to take over the Hillsdale plans, which based on information provided by Metavation to the PBGC, have a total of $47 million in assets and $93 million in liabilities.
Calls to Revstone Industries and the lawyers involved in the Kentucky lawsuits were not returned.
