Well, I’ve now heard that my old company, which owes me my last paycheck, is filing for Chapter 11. Great.
My questions are:
What the heck does this mean for me?
Do I need to contact someone to get on the list of “official” creditors?
I heard from a lawyer at my dad’s firm that payroll was third on the payout list. Is this still true if the company owes money to the government? (They not only didn’t pay us, they didn’t pay the IRS. GREAT move.)
Basically, I need to know how them filing Chapter 11 affects me being able to get what I’m owed.
It seems unlikely to me that employees of a company in Chapter 11 would have to put in individual claims to get paid. That would be far too cumbersome a process for the Bankruptcy Court to handle.
Plus, Chapter 11 is a reorganization, not a liquidation. Chapter 11 is just a tool to freeze claims and lawsuits against the company until they can arrange a reorganization of their debts and finances to satisfy their creditors. There will be a trustee appointed to oversee the company’s finances, but in most circumstances, things will continue as before. I would be surprised if one of the first acts by the trustee is to authorize the continued payment of standard payroll obligations. (If you’re waiting on a big fat bonus check or something, that might be withheld, but a regular paycheck should come in due course.)
Yes, if it looks like the company is in so deep that it’ll never get out, a creditor might petition to convert the Chapter 11 into a Chapter 13 liquidation, in which case the company’s assets are allocated according to a preference scheme. And yeah, the Government sits on top of the heap when it comes to liquidation, so tax liens will be paid in full before other creditor’s claims are considered.
That’s my best guess. I see Bankruptcy cases after they’ve come out of the Bankruptcy Court, so the actual incantations-and-chicken-blood procedure of dealing with the employees of a Chapter 11 company is unclear to me.
and ask them about filing a claim. Most importantly, make sure you are in the Matrix. No, no - Keanu Reeves is not involved - it is the table of interested parties the Trustee keeps. Whenever s/he does something that affects your rights, s/he’ll send you a notice. PAY ATTENTION TO THEM and you’ll be fine.
(You wouldn’t believe how many people receive official court documents - including summmonses - and ignore them!)
Thanks…I knew there had to be someone I need to call to get on the list. I’m just worried now that things will get lost in the mail when I move.
[rant mode on]
It just pisses me off…I’m trying to get paid for hours I worked in AUGUST, for God’s sake! And now I’m wondering if I’ll ever see a W-2 form come next year. Thank GODDESS I left the fucking company already.
Of course, they owe the IRS over a million dollars, so the chances I’ll ever see my paycheck are about nil. But dammit, I’m gonna try.
[/rant mode off]