Portland, OR asked in Business Law, Civil Litigation, Contracts and Employment Law for Oregon

Q: Can I sue a company for lost wages who recruited me and then went bankrupt 3 months later due to hidden money issues?

Company recruited me away from a 14 year career and offered me 150 k salary and 20k equity stock. Three months later the board fired the ceo and at the same time the new cfo did an analysis on the company’s finances and found 80 million dollars of debt that was not disclosed to any new employee. The company closed and let everyone go with no severance. Can I sue them for anything and recoup my salary and now worthless stock? They are being sued by multiple creditors currently and are liquidating everything

2 Lawyer Answers
Mr. Michael O. Stevens
Mr. Michael O. Stevens
Answered
  • Hillsboro, OR
  • Licensed in Oregon

A: You could certainly try, but given they are bankrupt it may be a pointless effort since they have no money.

Joanne Reisman
Joanne Reisman
Answered
  • Portland, OR
  • Licensed in Oregon

A: It isn't clear if this company is bankrupt in the sense that they closed their doors or in the sense that they filed for an actual bankruptcy. In the latter case you would want to file a proof of claim and see if you get paid something because claims for wages have a somewhat higher priority.

Yes you can sue the company. Anyone can sue anyone. But it might be pointless as you will spend your own money to pay your attorney and you may never recover anything if the company is truly underwater. But you can investigate if it would be worth while, because while the company has a lot of debts, the question still remains whether their net worth is great then their debt such that in a liquidation there would be some money to pay you. It can be the case that a company can have assets like land, buildings, equipment and inventory which when liquidated will generate case to pay debts, but as an operating concern the company is bankrupt because the company doesn't have the cash flow from daily operations to service the debt. I wouldn't get my hopes up, but you could look into this.

I would recommend contacting BOLI (Oregon's Bureau of Labor and Industries) as BOLI can and will pursue case of failure to pay wages, especially the failure to pay minimum wages, at no cost to you. Whether BOLI will seek your full compensation package you were promised, I don't know. But you can certainly call them and find out.

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