The opinion of the court was delivered by: Garland E. Burrell, Jr. United States District Judge
Plaintiff HILDA L. SOLIS, Secretary of Labor, United States Department of Labor ("Secretary") under the authority granted to her by §§ 502(a)(2) and (5) of the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. §§ 1132(a)(2) and (5), has filed a Complaint against AC GENERAL ENGINEERING, INC. ("ACGE"), CHRISTOPHER BARRINGER ("Barringer"), individually, ATILANO ALCALA ("Alcala"), individually, and the AC GENERAL ENGINEERING, INC. 401(K) PROFIT SHARING PLAN (the "Plan"), an employee benefit plan within the meaning of Section 3(3) of ERISA, 29 U.S.C. § 1002(3).*fn1
A. The Secretary, ACGE, Barringer, Alcala, and the Plan (collectively, the "parties") admit that the Court has jurisdiction over this action under ERISA § 502(e)(1), 29 U.S.C. § 1132(e)(1), and that venue lies in the Eastern District of California under ERISA § 502(e)(2), 29 U.S.C. § 1132(e)(2).
B. Defendants ACGE, Barringer, Alcala and the Plan (collectively "Defendants") waive filing of an Answer and further waive entering any affirmative defense, counterclaim, or third-party complaint, or any other defenses that they may have in this case.
C. The parties agree to the entry of this Consent Judgment & Order. The parties further agree that this Consent Judgment & Order shall fully settle all claims of the Secretary asserted in the Complaint filed in this matter.
D. All parties expressly waive Findings of Fact and Conclusions of Law.IT IS HEREBY ORDERED, ADJUDGED, and DECREED that:
1. Defendants ACGE, Barringer and Alcala are jointly and severally liable for $46,868.81 in losses plus lost-opportunity costs caused to the Plan ("Loss Amount"), and judgment is hereby entered against them in that amount. Lost-opportunity costs are calculated applying the rate set forth in 26 U.S.C. § 6621.
2. Defendant Alcala agrees that, in the event that he files for bankruptcy protection under any chapter of the United States Bankruptcy Code, within thirty (30) calendar days of filing a petition in any U.S. Bankruptcy Court, he will (i) notify the Secretary of his bankruptcy; and (ii) execute a stipulation with the Secretary and consent to the entry of an Order that the identified Loss Amount plus lost-opportunity costs calculated through the date on which he files for bankruptcy is a non-dischargeable debt pursuant to section 523(a)(4) of the U.S. Bankruptcy Code, 11 U.S.C. § 523(a)(4) ("Stipulation"). The Stipulation and entry of a subsequent Order shall further provide that lost-opportunity costs will continue to accrue at the rate set forth in 26 U.S.C. § 6621 from the date the relevant nondischargeability Order is issued until such time as the Loss Amount is paid to the Plan in full.
3. Defendant ACGE is hereby removed as Plan Administrator and fiduciary of the Plan.
4. Defendants Barringer and Alcala are permanently enjoined and restrained from violating the provisions of Title I of ERISA, 29 U.S.C. §§ 1001-1191c.
5. Defendants Barringer and Alcala are permanently enjoined and restrained from future service as a fiduciary of, or service provider to, any ERISA-covered employee benefit plan, subject to the exceptions set forth below in Paragraphs 15, 16 and 17.
6. In reliance on the Declaration of Financial Status, submitted under oath to the Secretary by Barringer on March 17, 2011, and by Alcala on March 18, 2011, the Secretary declines to seek collection of the Loss Amount at this time. The Secretary reserves the right to bring a collection action against Barringer, Alcala and/or ACGE for the Loss Amount, or a portion thereof, at any time. Prior to initiating a collection action, the Secretary shall send Barringer and Alcala a written demand letter ("Secretary's Demand Letter") to the last home address that they provided to the Secretary. Within fifteen (15) calendar days of receiving the Secretary's Demand Letter, Barringer and Alcala shall separately and individually provide the Secretary with financial documents including, but not limited to, tax returns (for the three most recent years), bank statements, investment statements, and other similar financial statements relevant to his ability to restore the Plan's losses. If the documents submitted to the Secretary demonstrate that Barringer's and/or Alcala's gross individual household income and other earnings as defined in Paragraph 9 below, exceed $100,000.00 (one-hundred thousand dollars) in any twelve-month period, he will pay on behalf of the Plan within fifteen (15) calendar days of receipt of a notice from the Secretary, a sum equal to 50 percent (50%) of his gross income in excess of $100,000.00 (one-hundred thousand dollars).
7. Barringer and Alcala expressly agree that for the next seven (7) years, at the same time that each makes his personal income taxes filings with the Internal Revenue Service, he will concurrently provide copies of the following documents to the Secretary:
(i) True and accurate copies of tax returns filed in that year, and any requests for extensions; (ii) Payroll wage statements, for the last four (4) paychecks; and (iii) A notarized statement made under penalty of perjury detailing any newly-acquired real or personal ...