A hypothetical somewhat legal question

[Skibo]

A publicly traded company is in a bit of a cash crunch and is barely making payroll. Vendors are not being paid on time and employees have not been reimbursed for their out of pocket travel expenses for the last 6 weeks.

Now if that company would happen to file for bankruptcy, where would the employees stand? Are they just another creditor that must stand in line and hope to get a percentage or what they are owed? Since the company is in an "at will" state, I assume the employee has no recourse (like the company has any $$$) if the company fires him for refusing to travel in his dime.

[phjrsaunt]

Sounds nasty. Sorry, but I don't know anything about that subject.

[pema]

Per my cpa exam study book:

Levels of priority (after secured debts):

1) Administration costs associated with bankruptcy proceedings
2) Claims arising in ordinary course of debtor’s business after involuntary bankruptcy petition is filed but before order for relief in entered
3) Wages of bankrupt’s employees ($4,650 maximum each) accrued within ninety days before the petition in bankruptcy was filed (any excess is treated as a general claim) (does not include officer’s salaries)
4) And the list goes on an on from there…..

Doesn't say anything about travel reimbursement. Can send you a pdf of the list if you want.

[Hockey Mon]

A publicly traded company is in a bit of a cash crunch and is barely making payroll. Vendors are not being paid on time and employees have not been reimbursed for their out of pocket travel expenses for the last 6 weeks.

Now if that company would happen to file for bankruptcy, where would the employees stand? Are they just another creditor that must stand in line and hope to get a percentage or what they are owed? Since the company is in an "at will" state, I assume the employee has no recourse (like the company has any $$$) if the company fires him for refusing to travel in his dime.

I'm not a lawyer or cpa but I worked for a large, publically trade company that went Chapter 11 bankruptcy back in 2002. We still got paid and even got bonuses (although I'm not sure where that money came from). I don't know about the travel piece, since I didn't do any. I believe expenses were covered. I think it might depend on the type of bankruptcy the company files, Chapter 7 vs Chapter 11. I believe Chapter 7 is the close up shop, turn out the lights bankruptcy where as Chap 11 is the let's work this one out bankruptcy. The company I worked for was Exodus Communication and we eventually got bought by Cable & Wireless (and then was sold to Savvis). Good luck.

[flyboy55]

I don't know much about bankruptcy law but . . .



if it was my company treating me like that I'd take a f****** FLAMETHROWER to the place.

Would you like to borrow one?

[rich_big]

hits a little too close to home for me to comment, but I would not know anyway.


damn axium payroll...

[Tequila Revenge]

Man. I worked for a comapny that was in Chapter 11 and we had to bring our own toilet paper to work

Sounds like you better get your ducks in a row? Wonder if you could file multiple small claims against the corporation?

[Skibo]

Man. I worked for a comapny that was in Chapter 11 and we had to bring our own toilet paper to work

Sounds like you better get your ducks in a row? Wonder if you could file multiple small claims against the corporation?

I'm already a creditor, I don't think a judgment would do much but cost me filing fees. Ducks are lined up.

[Skibo]

I don't know much about bankruptcy law but . . .



if it was my company treating me like that I'd take a f****** FLAMETHROWER to the place.

Would you like to borrow one?

I would say yes but that would only reduce the sale value of the minimal assets available for my recovery.

On the bright side another 50% drop in the stock value and someone will pick them up for a song and cover the debts. The only question is how long????