Defunct Textile Firms Sued Over Pension Plans

A California trim company and a New York textile firm were sued by the U.S. Department of Labor for allegedly not forwarding more than $100,000 in employee contributions and loan repayments to a company 401k savings plan.

In addition, Richard Haik and Mitchell Ostrover (two officers from the sister companies) were named in the suit, filed Dec. 21 in U.S. District Court in New York against Beverly Trimming Co. and American Fabrics Co.

The lawsuit alleges that Haik and Ostrover violated the Employee Retirement Income Security Act by not forwarding plan contributions and loan repayments deducted from employees’ paychecks between January 2002 and December 2003. The filing asks the court to order Haik and Ostrover to restore the funds plus interest and for them to forfeit any account balances they have with the plan. Additionally, the Labor Department requests that an independent fiduciary be appointed to oversee the plan.

Neither Haik nor Ostrover was available for comment.

American Fabrics, which had operations in Bridgeport, Conn., and Bogalusa, La., shut down last summer. Beverly Trimming, based in Santa Monica, Calif., closed its doors in 2004. The pension plan for both companies covered about 106 workers and had $821,139 in assets as of June 30, 2006. —Deborah Belgum