Compliance October 22, 2004

Ex-Spartan Workers Sue Over Lost Pension Savings

October 22, 2004 (PLANSPONSOR.com) - A new lawsuit has alleged that more than 1,200 former Spartan International employees lost hundreds of thousands of dollars in retirement savings and benefits when the textile company suddenly shut down in 2001.
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The suit claims more than $555,068.68 in matching 401(k) funds for employees were not deposited in 2000 and an undetermined amount was not deposited in 2001. The suit says beneficiaries also were not notified of the values of their plans in either year. “There are people counting on this money for their retirement,” said Louis Saul, the Augusta attorney who filed the suit on behalf of former employees in three states. “This is a wrong that should be righted.”

Filed Friday in US District Court in Augusta, Georgia, the suit alleges that the Spartanburg, South Carolina-based Spartan’s officers and directors were guilty of mismanagement, misconduct as well as violations of the federal Employee Retirement Income Security Act (ERISA), the Associated Press reported. Specifically, the complaint alleges breach of fiduciary duties, negligence, and securities violations.

Plaintiffs’ lawyers asked for actual damages of more than $550,000 in addition to a punitive damage award and attorney’s fees.

Among the defendants are Walter Montgomery Jr., former Spartan International president and chairman; Barry Leonard, former president and chief executive officer; Larry Ostrower, former vice president and chief financial officer; Rocky Mankins, former vice president and treasurer; and six former directors, including Spartanburg Mayor Bill Barnet and Mac Cates.

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