|US Labor Department files lawsuit to appoint independent fiduciary to administer 401(k) plan after Los Angeles-area hotel ceased operations|
Date of action: Dec. 15, 2016
Type of action: Complaint
Name of defendants: Urban Hotels Inc., doing business as LAX Plaza Hotel
Allegations: Based on an investigation conducted by the U.S. Department of Labor’s Employee Benefits Security Administration, the department filed a complaint on Dec. 15, 2016, alleging that the defendants violated the Employee Retirement Income Security Act for failing to act solely in the interest of the participants and beneficiaries of the plan. The department alleges that prior to and at the time Urban Hotels ceased operations, the company failed to take sufficient steps to provide for the prudent and complete termination of the company’s 401(k) plan and trust. The complaint also alleges that the plan’s custodian would not authorize distributions of the remaining plan assets to participants and beneficiaries without direction from a properly appointed fiduciary or court-appointed independent fiduciary.
Plan administrator and trustee Hidebumi Minagawa is no longer residing in the U.S., and plan trustee Hailu Solomon’s whereabouts are unknown. As of Nov. 9, 2016, approximately $41,000 is due to be distributed to the remaining 14 plan participants.
Resolution: The department is seeking the removals of Hidebumi Minagawa as plan administrator and trustee, and of Hailu Solomon as trustee, and the appointment of an independent or successor fiduciary with discretionary authority to administer the plan in order to effectuate its termination and the distribution of the plan’s remaining assets.
Court: U.S. District Court for the Central District of California
Docket Number: 2:16-cv-09262
EBSA News Brief: 12/19/2016