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    themisfitkitten's Avatar
    themisfitkitten Posts: 114, Reputation: 22
    Junior Member

    Dec 22, 2015, 12:27 PM
    Recovering back pay from company in Chapter 11 Bankruptcy?

    Short version... I worked for a company for 5+ years that filed Chapter 11 bankruptcy this summer, and after a few weeks of delays on paydays and constant excuses, they eliminated my position for restructuring purposes. I was owed three weeks of pay that were promised both verbally and in my termination letter by middle of the first week of November.

    I have received one week of pay, and also pay stubs showing the correct (original) pay dates as well, but I have not actually received those two weeks' worth of pay.

    My state's labor laws require that an employer must pay any terminated employee (terminated for any reason: quit, fired, etc.) by the next scheduled payday (which would have been 11/14). I contacted the labor board and they said due to the bankruptcy they would not have any jurisdiction and I would have to seek private council. A friend had explained that if the company went under before paying me, the money owed would get rolled into the bankruptcy and it'd likely be years before I saw it, if ever.

    Is there someone I should contact to ensure that I can get this back pay, or at the very least this DOES get shown as monies still owed to me as part of the bankruptcy? I'm concerned that since I was sent a paystub (just a stub--company had been issuing treasurers checks to ensure payment) showing that I received that pay, that it might not even be evident that I didn't receive it.

    As a lawyer has been working with this company and a Trustee was recently appointed to this case, I feel like it should come up in their records but as I don't trust the company owner to be honest about anything, I'm concerned. I realize it's "only two weeks" of pay, but living paycheck to paycheck to begin with can be really thrown off when you unexpectedly stop getting paid. (I WAS, fortunately, able to open/collect on a UC claim, but... still. Plus, other employees there are still having pay issues and it's not right.)

    Thanks in advance, and I hope you all have a Merry Christmas, or an enjoyable remainder of December, however you celebrate (or don't)!

    talaniman's Avatar
    talaniman Posts: 54,051, Reputation: 10852

    Dec 22, 2015, 01:50 PM
    Look into this, Will Employees Be Paid When a Company Declares Chapter 7 Bankruptcy?

    And Priority Debts in Chapter 7 Bankruptcy | Bottom line CONSULT an attorney.

    The ehow link has other useful links also.
    joypulv's Avatar
    joypulv Posts: 21,593, Reputation: 2941
    current pert

    Dec 22, 2015, 01:57 PM
    See if you can contact the Bankruptcy Court directly. Payroll is indeed first priority. And yes, I think you are being lied to.
    themisfitkitten's Avatar
    themisfitkitten Posts: 114, Reputation: 22
    Junior Member

    Dec 22, 2015, 03:57 PM
    Thank you both for your very helpful answers! I always appreciate this site so much, even though it's been awhile since I've been on here. It's always a pleasure to get insight from other people in a more personal manner.

    After so many years with the company and having tried so hard to help it flourish, I've felt slapped in the face but was still trying to give them some time to make things right, but a person can only take so much when they have absolutely no fault in the situation.

    Thanks again, take care. :)

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