Legal Question in Employment Law in California

key employee rights in chapter 11

My employer, a public company, went into chapter 11 two months ago (they filed in Connecticut). At the time of the filing I was told I was named in the filing as a 'key employee' and would receive 6 months severance if they had to let me go during the chapter 11. This was an incentive to stay with them. I was later told the filing had been accepted by the bankruptcy court (all this info was verbal from the COO & CEO).

The company has just let me go and now says it will only pay me 3 months severance unless I sign an 18 month global non-compete & give up all rights to legal claims against them. This would make it near impossible for me to get a job.

How can I find the document filed with the court in White Plains NY stating 6 months for the named key employees and how enforceable is it?


Asked on 4/02/03, 3:53 am

1 Answer from Attorneys
Terry A. Nelson Nelson & Lawless

Re: key employee rights in chapter 11

First, assume you were lied to by the officers, and that the court has no record of 6 month benefits promise. Without proof of the terms, probably nothing can be done.

Next, assume the court has such records. Then you will have to present your claim to the court, maybe spending attorney fees to do so, on the hope there will be money to pay you.

Alternatively, you can take the 3 month offer, but that non-compete could cause you grief, even if not found to be enforceable.

Bottom line, you should probably pay to consult with counsel before making that decision. Call me if interested.

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Answered on 4/02/03, 6:39 pm


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