The opinion of the court was delivered by: CHARLES H. TENNEY
Plaintiffs, Alan and Michael Hecht, acting as co-executors of their father's estate, bring this action for illegally withheld and undistributed pension benefits against defendants George Hecht, the former pension plan trustee; Martin Hecht, his son and a current trustee; and Colorboard Packaging Corporation ("Colorboard"), the plan's sponsor company. Plaintiffs allege a variety of claims under the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1001 et seq, particularly 29 U.S.C. §§ 1104 and 1132. Plaintiffs seek money damages as well as an injunction against the current trustees prohibiting their future participation in the governance of the pension plan. The former pension plan trustee, George Hecht, is deceased; the current plan trustees are Rose Hecht Sherman and Martin Hecht.
This action was originally before Judge Michael B. Mukasey of the Southern District of New York, who presided over pre-trial matters before transferring the case to these chambers. The court held a bench trial in December, 1993. For the following reasons, the court dismisses plaintiffs' claims.
Sometime in the mid-1950s, George Hecht, Sigmund Hecht and Rose Hecht Sherman formed Pound Ridge Properties, Inc., one asset of which was a 70 acre parcel of undeveloped real estate in the town of Pound Ridge, located in northern Westchester County, New York.
In 1964, Pound Ridge Properties conveyed this 70 acre parcel to the Pension Plan of Mid-States Container Corporation ("Mid-States") in exchange for a $ 40,000 promissory note. Mid-States was a closely held family corporation in the business of manufacturing corrugated cardboard boxes. Mid-States' three principal shareholders were George Hecht, Sigmund Hecht and Rose Hecht Sherman, who were also the company's President, Vice-president and Secretary/Treasurer, respectively. George Hecht and Rose Hecht Sherman were also brother and sister of the plaintiffs' decedent, Sigmund Hecht.
In 1976, Mid-States changed its name to Colorboard Packaging Corporation. George Hecht, Sigmund Hecht and Rose Hecht Sherman remained the three principal shareholders and officers, each with a one-third interest in the company. Subsequently, on October 1, 1976, the Mid-States Pension Plan was restated. The pension plan agreement, now entitled the "Colorboard Packaging Corp. Retirement Plan and Trust," (the "Plan"), purportedly conformed to financial reporting, disclosure and other requirements of ERISA.
The Plan also provided for Retirement and Death Benefits to be paid in the following manner:
7.1 The benefits of a member shall not be distributed until his death, retirement or other termination of service and then only to the extent hereinafter provided:
In the event of a death of a . . . retired member before complete distribution of his benefit, the net value of his account or all the undistributed balance of his retirement or termination benefit, as the case may be shall constitute his Death Benefit and shall be distributed as provided in Section 8 to the deceased members designated beneficiary or, if no designation of beneficiary is then in effect, to the estate of the deceased member.
Upon retirement the net value of his account shall constitute his Retirement Benefit and shall be ...