Legal Question in Bankruptcy in District of Columbia

Chapter 11 and employees

The company I worked for told its employees that it recently filed for chapter 11 bankruptcy. On 7/30/01 a meeting was called and all employees including myself were told that the company was no longer in operation due to bankruptcy and that we would not receive our paychecks which are distributed the 15th and 30th of each month. Can this legally be done? We were not given any advanced notice of the state of affairs of the company and we were not paid funds due to us. Is there anyway that we, the employees can receive what is owed to us? The president of the school sent me a letter stating that ''if and when funds become available'' then we will be paid. Thank you in advance for any help or advice you can provide in this matter.


Asked on 8/07/01, 2:38 pm

1 Answer from Attorneys
Daniel Press Chung & Press, P.C.

Re: Chapter 11 and employees

It is correct that once a company files Chapter 11, they cannot pay wages due pre-petition without a court order (which will generally be sought and usually granted if the co. intends to stay in operation and needs to keep the employees). The good news is that wages (up to a dollar limit) are at the top of the priority list for payment once payments of pre-petition debts begin. The bad news is that this may be many months away.

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Answered on 8/10/01, 12:22 am


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