Diplomat Resort faces rate question - DOL: No due diligence The Labor Department suit, filed in federal district court in Fort Lauderdale, alleges that the pension fund trustees violated the federal Employee Retirement Income Security Act (ERISA) by imprudently proceeding with the Diplomat project without any feasibility studies, market analyses, market-tested construction budgets, construction schedules, economic models, financing arrangements or other information with which to make an informed decision.
The suit also alleges that the trustees failed to maintain adequate financial controls over construction costs and paid excessive fees to service providers on the project.
At a September 1997 board meeting, the pension plan trustees voted to buy the Diplomat property on behalf of the Plumbers' pension plan from Union Labor Life Insurance Co. (ULLICO).