Personal Bankruptcy Chapter 11 and wages

[andrew]

I was laid off from a company and was not paid for the final three weeks of service. That company subsequently filed for Ch 11. The company has some assets and will be selling them off. How can I ensure that I will be included in the creditor list? Do I need to file a claim somehow (how?). Also, where would I fall in the creditor hierarchy?

Thanks

 

[Michael Wechsler]

Did you call the company and inquire/demand your wages be paid? Many companies continue to pay employee wages even though they have filed for Chapter 11 protection. You may want to contact them immediately!

If I remember correctly, Chapter 11 provides that professional fees come first and then come employees wages up to $4,000 which are due within 90 days from the filing of Chapter 11 by the company. There is also another provision which provides another $4,000 in benefits too if memory serves correctly. Try to avoid dealing with this!

 

[andrew]

Thanks Michael. I have contacted the acting CEO numerous times to inquire about back pay. He has always given me vague "we are in the process of determining our course of action going forward" responses. Very non-commital.

Also, they laid me off months ago (after not paying me for the final three weeks of service - kind of like negative severance). By the way, this is (was) a publically traded company.

Is there anything I need to do legally to file my claim or am I already listed? How can I find out?

 

[Michael Wechsler]

How long after your layoff did the company file for Chapter 11?

If it were me, and this is only what I might do so decide for yourself, I would send the CEO a certified return receipt letter, as well as human resources, confirming your conversations with him and the refusal to pay monies owed and earned as an employee which are long overdue, and the complete avoidance of payment for unexplained and unsatisfactory reasons. I would pose the question as to whether any salaries have been paid since the date you have ceased to receive payment and, if they were, why there was such preferential treatment given to those employees. I'd demand immediate payment within 10 days or have no other choice but to pursue this matter legally against all involved as well as potentially discussing the matter with the press. Frequently this will avoid your having to take legal action since they realize that you will not let an abuse just go away and will stand up for your rights. If this happened to a number of people you may want to take it to a class action attorney and can provide you with a number of firms upon request....

It may take an unsatsifactory amount of time with the legal process. It may also yield an unsatisfactory result. This may get what is wanted without the pain and wait time.

 

[andrew]

Thanks again Michael.

A number of us (20) were laid off about 7 weeks ago. The company filed CH 11 this week (to be converted to Ch7 after assets are sold). The company says they have a buyer that will yield about .68 on the dollar for unsecured creditors. This tells me I will not see the whole amount, but I'd like to make sure I'm on the list of creditors to get .68.

Would it help to attempt to file a claim with the company's bankruptcy lawyers?

If you could recommend some class action firms, I'd appreciate that. Be aware that the ex-employees are in GA and the company is in CA.