Class Action Lawsuit against LLC

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WesWatson

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The Long Island, NY company that I work for recently filed Chapter 11 bankruptcy. The company was $693 million in debt. The company secured a $320 million loan this year from GE for purposes of running the company for the next 3 years.

$170 million never made it into the company.

Since the bankruptcy filing, several accounting practices have come into question.

The 2 co-ceo's have since started a new LLC and tried to buy their own company with a stalking horse bid. They have bid just under $200 million to salvage the original company. In the bid, there was a provision that if bought, the two co-ceo's would not be held liable for the failure of the original company and that they would be protected for civil suit.

The judge has since said he would not accept the bid to buy the company unless the 2 co-ceo's took out the provision of protection.

Does this mean there is, or could be, grounds for a civil suit against the 2 co-ceo's? Several people have been "laid-off" since the bankruptcy with no notice. It seems that it would be illegal for the 2 co-ceo's to take millions of dollars from a capital loan and pocket the money.

This was a nation wide retailer and and the lay offs have happened for people all over the country. Myself being in Texas.

Any advice on this process would be a great help.:mad:
 
Questionable accounting practices - if this is a public company, do you know if a complaint was filed with the SEC so they can launch an investigation.? Regarding the lawsuits against the 2 co-ceo's, that will depend on what the evidence that is being presented is for the case as well as on the final ruling from the courts. There is always a potential for lawsuits when companies go bankrupt.
 
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