Legal Question in Bankruptcy in New York

Employee rights under Chapter 11

Our N.Y. based firm filed Chapter 11 two weeks ago. I'm the manager of a Pa. branch and we have not received pay for these two weeks. We are told it has to do with the proceedings. Is this on the up&up? How long should I wait? What recourse do the employees have if no pay arrives? Can we legally refuse to open the store if pay is not forth coming?


Asked on 5/30/03, 8:02 am

2 Answers from Attorneys
Neil Colmenares The Law Office of Neil E. Colmenares, P.C.

Re: Employee rights under Chapter 11

Please call my office at 718-888-3108 so that I may give you a brief overview of Chapter 11 Bankruptcy law.

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Answered on 5/30/03, 8:06 am
Matthew Nahrgang Nahrgang & Associates, P.C.

Re: Employee rights under Chapter 11

The only protection employees have regarding bankruptcy is that their claims for payment, which arose within 90 days before filing, are entitled to priority treatment. Such a claim is treated similar to taxing authorities.

For claims incurred after filing, the automatic stay does not apply. You have the same rights you had prior to the case. However, collecting is certainly another matter.

You are probably an employee at will. That means you can quit whenever you wish. They can also fire you whenever they wish.

The only other protection employees have is under the wage and hour law. That provides that you must be paid at least a minimum wage. Again, just as you have a tough time collecting, so does the state.

I trust this has been helpful, but feel free to call or E-mail on a free initial basis.

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Answered on 5/30/03, 9:04 am


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