According to a press release, the payment is part of a consent judgment granted by the U.S. District Court for the Western District of New York in favor ofthe U.S. Department of Labor.
The department sued the plans’ former trustees for allegedly violating the Employee Retirement Income Security Act (ERISA) by using plan assets to buy corporate notes from their parent company, Lanesborough Corp., that later became worthless.
According to the press release, the trustees twice voted to buy the notes even though the Lansborough filed for bankruptcy in September 2000.
The forrmer trustees named as defendants were Kenneth Funsten, Armen Dekmejian, Lawrence Kaminski, Michael Lindaman, Frank Giumpa, Lawrence Zollinger and Frank Miller.
The PBGC took over the plans in October 2004.