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JP
JP, Attorney
Category: Bankruptcy Law
Satisfied Customers: 109
Experience:  Represented creditors and individuals in bankruptcy and consumer matters.
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My ex employer had filed for bankruptcy and I was never notified.

Customer Question

My ex employer had filed for bankruptcy and I was never notified. Towards the end of employment with them, my last two paychecks were bounced. Also other compensation was not paid. In case of liquidation and payout, what decides who gets paid from the available funds if any? Also how do I know if there were any payouts?
Submitted: 8 years ago.
Category: Bankruptcy Law
Expert:  JP replied 8 years ago.

Q: In case of liquidation and payout, what decides who gets paid from the available funds if any?

 

A: The status of your claim determines who gets paid from the available funds. In this case you are an unsecured creditor seeking back wages and will only be entitled to a percentage of the debt owed to you pursuant to the employer's plan of reorganization in a chapter 11 case. Furthermore, in order to get considered for payment through a bankruptcy plan, you must file a proof of claim in your employer's bankruptcy case. If you contact the bankruptcy court clerk, they should be able to tell you where to locate a proof of claim form. If your employer has filed for a chapter 7 case, then you generally will not receive any payment on your unsecured claim.

 

Q: Also how do I know if there were any payouts?

 

A: The only way to know if there has been any payouts, is to request the information from the trustee administering the case. However, they most likely will not give you that information until after you file a proof of claim to show that you are a creditor with an interest in the case.

 

You should participate in your employers case as a creditor and file a proof of claim to place the court and the trustee on notice that you are a creditor interested in your fair share of the distribution under the plan, if any. It wouldn't hurt to also file a request for notice of all documents filed in the case.

 

I hope you found this information helpful.

 

Best Regards.