[Federal Register Volume 62, Number 153 (Friday, August 8, 1997)]
[Notices]
[Pages 42837-42839]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-21004]
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DEPARTMENT OF LABOR
Pension and Welfare Benefits Administration
[Application No. D-10439, et al.]
Proposed Exemptions; Alloy Die Casting Co. Employees Profit
Sharing Plan and Trust (the Plan), et al.
AGENCY: Pension and Welfare Benefits Administration, Labor.
ACTION: Notice of proposed exemptions.
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SUMMARY: This document contains notices of pendency before the
Department of Labor (the Department) of proposed exemptions from
certain of the prohibited transaction restrictions of the Employee
Retirement Income Security Act of 1974 (the Act) and/or the Internal
Revenue Code of 1986 (the Code).
Written Comments and Hearing Requests
Unless otherwise stated in the Notice of Proposed Exemption, all
interested persons are invited to submit written comments, and with
respect to exemptions involving the fiduciary prohibitions of section
406(b) of the Act, requests for hearing within 45 days from the date of
publication of this Federal Register Notice. Comments and requests for
a hearing should state: (1) the name, address, and telephone number of
the person making the comment or request, and (2) the nature of the
person's interest in the exemption and the manner in which the person
would be adversely affected by the exemption. A request for a hearing
must also state the issues to be addressed and include a general
description of the evidence to be presented at the hearing.
ADDRESSES: All written comments and requests for a hearing (at least
three copies) should be sent to the Pension and Welfare Benefits
Administration, Office of Exemption Determinations, Room N-5649, U.S.
Department of Labor, 200 Constitution Avenue, N.W., Washington, D.C.
20210. Attention: Application No. stated in each Notice of Proposed
Exemption. The applications for exemption and the comments received
will be available for public inspection in the Public Documents Room of
Pension and Welfare Benefits Administration, U.S. Department of Labor,
Room N-5507, 200 Constitution Avenue, N.W., Washington, D.C. 20210.
Notice to Interested Persons
Notice of the proposed exemptions will be provided to all
interested persons in the manner agreed upon by the applicant and the
Department within 15 days of the date of publication in the Federal
Register. Such notice shall include a copy of the notice of proposed
exemption as published in the Federal Register and shall inform
interested persons of their right to comment and to request a hearing
(where appropriate).
SUPPLEMENTARY INFORMATION: The proposed exemptions were requested in
applications filed pursuant to section 408(a) of the Act and/or section
4975(c)(2) of the Code, and in accordance with procedures set forth in
29 CFR Part 2570, Subpart B (55 FR 32836, 32847, August 10, 1990).
Effective December 31, 1978, section 102 of Reorganization Plan No. 4
of 1978 (43 FR 47713, October 17, 1978) transferred the authority of
the Secretary of the Treasury to issue exemptions of the type requested
to the Secretary of Labor. Therefore, these notices of proposed
exemption are issued solely by the Department.
The applications contain representations with regard to the
proposed exemptions which are summarized below. Interested persons are
referred to the applications on file with the Department for a complete
statement of the facts and representations.
Alloy Die Casting Co. Employees' Profit Sharing Plan and Trust (the
Plan), Located in Anaheim, California
[Application No. D-10439]
Proposed Exemption
The Department is considering granting an exemption under the
authority of section 408(a) of the Act and section 4975(c)(2) of the
Code and in accordance with the procedures set forth in 29 CFR Part
2570, Subpart B (55 FR 32836, 32847, August 10, 1990). If the exemption
is granted, the restrictions of section 406(a), 406 (b)(1) and (b)(2)
of the Act and the sanctions resulting from the application of section
4975 of the Code, by reason of section 4975(c)(1) (A) through (E) of
the Code, shall not apply to the proposed cash sale by the Plan to the
Alloy Die Casting Co./W.E. Holmes, Inc. (Alloy), the Plan sponsor and a
party in interest with respect to the Plan, of units (the Units) in the
Krupp Insured Plus-II Limited Partnership (the Partnership), provided:
(a) the sale is a one-time transaction for cash; (b) no commissions or
other expenses are paid by the Plan in connection with the sale; (c)
the Plan will receive $1.15 above the highest bid price for the Units
at the most recent sealed bid auction for the Units which has occurred
prior to the time of the sale; and (d) Alloy will purchase the Units
from the Plan within 10 calendar days following the granting of the
exemption proposed herein.
Summary of Facts and Representations
1. On June 23, 1997, the Department proposed an exemption for the
subject transaction (62 FR 33924). However, the exemption proposed
therein provided for a sales price for the Units of the greater of: (1)
$13.05 per Unit, or (2) $1.15 above the highest bid price for the Units
at the most recent sealed bid auction for the Units which has
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occurred prior to the time of the sale. The floor price of $13.05 per
Unit derived from the highest bid price at the most recent sealed bid
auction prior to the filing of the exemption application request.
2. The applicant represents that subsequent to the publication of
the proposed exemption, Krupp Insured Plus Corp. (Krupp), a general
partner of the Partnership, announced that all holders of Partnership
Units would receive a special distribution (the SD) of $.71 per Unit.
The applicant represents that this SD constitutes a material change
which necessitates an amendment to the proposed exemption cited in rep.
1, above. The applicant states that the SD will result in a decrease in
the fair market value of each Unit at the next sealed bid auction.
Consequently, if the exemption were to be granted as originally
proposed, Alloy would be paying significantly more than the fair market
value of the Units. While Alloy felt that the proposed transaction, as
published in the above cited proposed exemption, was close to fair
market value at the time of the application and the publication, Alloy
no longer believes that the proposed purchase price therein is
representative of fair market value in light of the SD. Therefore,
Alloy has requested that the proposed exemption be amended to the price
of $1.15 above the highest bid price for the Units at the most recent
sealed bid auction for the Units which has occurred prior to the time
of the sale, but subsequent to the SD. The applicant further represents
that Alloy will purchase the Units from the Plan within 10 calendar
days of the granting of the exemption proposed herein.
3. For a more complete statement of the circumstances involved in
the subject transaction, refer to the notice of proposed exemption
cited in rep. 1, above.
FOR FURTHER INFORMATION CONTACT: Gary H. Lefkowitz of the Department,
telephone (202) 219-8881. (This is not a toll-free number.)
Bloom Consulting Corporation Profit Sharing Plan (the Plan), Located in
Tiburon, California
[Application No. D-10440]
Proposed Exemption
The Department of Labor is considering granting an exemption under
the authority of section 408(a) of the Act and section 4975(c)(2) of
the Code and in accordance with the procedures set forth in 29 CFR part
2570, subpart B (55 FR 32836, August 10, 1990). If the exemption is
granted, the sanctions resulting from the application of section 4975
of the Code, by reason of sections 4975(c)(1) (A) through (E) of the
Code shall not apply to the proposed purchase by the Plan of shares of
common stock of Valley Forge Corporation (the Stock) from the Martin J.
Bloom Family Trust, (the Trust) a disqualified person with respect to
the Plan provided that the following conditions are satisfied: (1) the
purchase of the Stock will be a one-time transaction for cash; (2) the
Plan will purchase the Stock at a price no greater than the fair market
value of the Stock as reported on the American Stock Exchange (AMEX) on
the date of purchase; (3) the Plan will not pay any expenses in
connection with the proposed transaction; and (4) the purchase of the
Stock shall represent no more than 25% of the fair market value of the
Plan's assets.
Summary of Facts and Representations
1. The Plan is a profit sharing plan established and maintained by
Bloom Consulting Corporation with one participant, Martin Bloom. As of
September 1996, the fair market value of the Plan's assets was
$5,307,723. In addition, Mr. Bloom is also the sole owner of Bloom
Consulting Group which specializes in real estate investment and
management consulting services. The Plan's trustees are Mr. Bloom and
Theodore Desloge, Jr. Martin J. Bloom is also the owner of 100% of the
beneficial interest in the Trust.
2. Mr. Bloom proposes that the Plan purchase the Stock from the
Trust. The Stock is traded on the American Stock Exchange (the AMEX).
The purchase will be a one time transaction for cash. The total
purchase price of the Stock will be determined by multiplying the
number of shares to be purchased by the Plan by the closing price of
the Stock as quoted on the AMEX on the date of the transaction. The
value of the total shares of the Stock to be purchased by the Plan will
be equal to the lesser of (a) $1,000,000 or (b) 25% of the fair market
value of the Plan's assets at the time the transaction closes. The Plan
will not pay any commissions or other expenses in connection with the
purchase of the Stock.
3. Mr. Bloom believes it is in the interest of the Plan to purchase
the Stock. The Stock is a desirable investment for the Plan because of
its history of steady growth. Further, Mr. Bloom believes that the
market undervalues the stock, and it is a very safe investment for the
Plan. Mr. Bloom expects such growth to continue. Further, Mr. Bloom
believes that the market undervalues the stock, and it is a very safe
investment for the Plan. In addition, the proposed transaction will
permit the Plan to acquire the Stock without incurring any sales
commissions or fees which ordinarily are associated with such a
purchase on the open market.
4. In summary, the applicant represents that the proposed
transaction meets the statutory criteria of section 4975(c)(2) of the
Code because: (a) the purchase of the Stock is a one time transaction
for cash; (b) the Plan will pay no more than the fair market value of
the Stock as traded on the AMEX; (c) no sales commissions or other
expenses will be incurred by the Plan; and (d) the value of the total
shares of Stock to be purchased by the Plan shall be lesser of
$1,000,000 or 25% of the Plan's total assets.
Notice to Interested Persons: Since Mr. Bloom is the only
participant of the Plan, thus the only participant affected by the
proposed transaction, it has been determined that there is no need to
distribute the notice of proposed exemption to interested persons.
Comments and hearing requests on the proposed transaction are due 30
days after the date of publication of this notice in the Federal
Register.
FOR FURTHER INFORMATION CONTACT: Allison Padams of the Department,
telephone (202) 219-8971. (This is not a toll free number.)
General Information
The attention of interested persons is directed to the following:
(1) The fact that a transaction is the subject of an exemption
under section 408(a) of the Act and/or section 4975(c)(2) of the Code
does not relieve a fiduciary or other party in interest of disqualified
person from certain other provisions of the Act and/or the Code,
including any prohibited transaction provisions to which the exemption
does not apply and the general fiduciary responsibility provisions of
section 404 of the Act, which among other things require a fiduciary to
discharge his duties respecting the plan solely in the interest of the
participants and beneficiaries of the plan and in a prudent fashion in
accordance with section 404(a)(1)(b) of the act; nor does it affect the
requirement of section 401(a) of the Code that the plan must operate
for the exclusive benefit of the employees of the employer maintaining
the plan and their beneficiaries;
(2) Before an exemption may be granted under section 408(a) of the
Act and/or section 4975(c)(2) of the Code, the Department must find
that the exemption is administratively feasible, in the interests of
the plan and of its participants and beneficiaries and
[[Page 42839]]
protective of the rights of participants and beneficiaries of the plan;
(3) The proposed exemptions, if granted, will be supplemental to,
and not in derogation of, any other provisions of the Act and/or the
Code, including statutory or administrative exemptions and transitional
rules. Furthermore, the fact that a transaction is subject to an
administrative or statutory exemption is not dispositive of whether the
transaction is in fact a prohibited transaction; and
(4) The proposed exemptions, if granted, will be subject to the
express condition that the material facts and representations contained
in each application are true and complete and accurately describe all
material terms of the transaction which is the subject of the
exemption. In the case of continuing exemption transactions, if any of
the material facts or representations described in the application
change after the exemption is granted, the exemption will cease to
apply as of the date of such change. In the event of any such change,
application for a new exemption may be made to the Department.
Signed at Washington, DC, this 5th day of August, 1997.
Ivan Strasfeld,
Director of Exemption Determinations, Pension and Welfare Benefits
Administration, Department of Labor.
[FR Doc. 97-21004 Filed 8-7-97; 8:45 am]
BILLING CODE 4510-29-P