Saving Savings

WHEN Carter Hawley Hale Stores went bankrupt in 1991, the employees weren’t just out of a job. They lost much of their retirement savings, too. The California-based retailer ran a 401(k) retirement plan enrolling ten thousand employees, with Carter Hawley Hale stock as the only investment option. The company emerged from bankruptcy in 1992, but in the meantime, the 401(k) plan had lost about 90 per cent of its value.

More recently, Color Tile Inc., a floor-covering chain, was another company that put most of its 401(k) assets into the company itself. Color Tile invested the money in its own stores, which it then leased back to the company. Color Tile went into Chapter 11 last year, and now the employees cannot touch their 401(k) money.

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Patrick Chisholm

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WHEN Carter Hawley Hale Stores went bankrupt in 1991, the employees weren’t just out of a job. They lost much of their retirement savings, too. The California-based retailer ran a 401(k) retirement plan enrolling ten thousand employees, with Carter Hawley Hale stock as the only investment option. The company emerged from bankruptcy in 1992, but in the meantime, the 401(k) plan had lost about 90 per cent of its value.

More recently, Color Tile Inc., a floor-covering chain, was another company that put most of its 401(k) assets into the company itself. Color Tile invested the money in its own stores, which it then leased back to the company. Color Tile went into Chapter 11 last year, and now the employees cannot touch their 401(k) money.