Legal Question in Bankruptcy in Illinois
labor contracts
Can a collectivly bargined labor contract be vacated by bancrupcy court.
Asked on 10/05/03, 5:13 pm
2 Answers from Attorneys
Thaddeus Hunt
Law Offices of Thaddeus Hunt
Re: labor contracts
In a word, Yes. Bankruptcy judges are granted wide lattitutde to dissolve contracts between the Debtor corporation and the union. If you are referring to a cahpter 11 case, the primary purpose of a Chapter 11 is to return the Debtor corporation to profitability and if a contract has to be broken to do it, then a judge will.
Answered on 10/05/03, 10:06 pm
David Leibowitz
Leibowitz Law Center
Re: labor contracts
Yes but only under rather restricted circumstances. This is governed by Section 1113 of the Bankruptcy Code which is too long to reproduce here. This was used in the United Airlines case among others recently.
Answered on 10/05/03, 11:37 pm
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