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Terry L.
Terry L., Attorney
Category: Bankruptcy Law
Satisfied Customers: 2820
Experience:  Better Business Bureau. 18yrs bankruptcy experience. Chicago Bar Assoc. American Bankruptcy Institute member.
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I filed a petition in small claims court to get my 2 remaining

Customer Question

I filed a petition in small claims court to get my 2 remaining severance payments from my former employer, and I had a mediation scheduled in Travis Co. on Thurs. Sept. 3rd. My company was purchased by a new company on Aug 7, however my legal agreement binds all successors and assigns...so I was just waiting for Thurs to come along and if no payment, then I was just going to amend my petition to include the new company as a defendant. I received a call today from the mediation representative informing me that my old company has filed bankruptcy and will not be participating in the mediation. My question is..does the chapter 7 bankruptcy (a Stay was also issued) of the old company interfere with me now filing against the new company, and/or will I first need to determine if my severance agreement was included in their bankruptcy? I am prepared to file an amended petition naming the new company but not sure if I should since I don't know what liabilities they inherited.
Submitted: 7 years ago.
Category: Bankruptcy Law
Expert:  Terry L. replied 7 years ago.
If the first party filed chapter 7 bankruptcy, and there are no assets, you cannot proceed against the first company directly. If you feel the claim would fall under one of the nondischargeability items under 11 USC 523, you can file an adversary claim against them to have the court rule if it is so. You may have a claim against the purchaser, if they bought out the prior company. You need to amend to dismiss the first company, since the automatic stay prohibits you from proceeding. You can amend to include the new company if you can show that they are responsible to pay the severance.
Customer: replied 7 years ago.
First, I have no idea what 11 USC 523 means. Second, how do I find out if the new company is responsible to pay former employees severance agreements? Would I first have to wait and see the old company included me as a creditor?
Expert:  Terry L. replied 7 years ago.
523 are the exceptions to discharge
http://www.doney.net/bkcode/11usc0523.htm

You can continue the suit to litigate whether the new company has to pay out severance. You said your legal agreement binds all successors, so that is good. If you received the automatic stay, then you were most likely included. You can call the debtor's lawyer and/or the bankruptcy court to confirm that you were listed in the petition. Good luck.
Customer: replied 7 years ago.

Okay..thanks. Last question, I promise! I did not receive the Stay, I was told about it by the mediation rep that called me today. SOOO, if I call the court and determine I am listed in the petition, I should just forget ever collecting I guess (unless there are assets which I doubt, since they have sold). I just don't want to waste anymore time and money on pursuing his if all I'm going to get from the new company is an answer to my amended petition that says, sorry..you were listed as a creditor and we are not responsible for your payout.

 

if I'm included it's too bad for me........

Expert:  Terry L. replied 7 years ago.
You can call the debtors attorney to request a copy of the notice of filing and the case number. You should receive notice from the court- mailings take about a week to go out.

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