Sherman Oaks, CA asked in Bankruptcy and Employment Law for California

Q: Filing a claim for unpaid wages. The company filed chapter 11 in the state of Delaware. I need more information.

is there a fee I can collect. Other vendors were paid for their services on the date of the job. In addition they lied for months saying payment was being processed, knowingly this was filed.

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2 Lawyer Answers
Cristina M. Lipan
Cristina M. Lipan
Answered
  • Bankruptcy Lawyer
  • Wantagh, NY

A: You will need to file a proof of claim either with the Bankruptcy Court or with the claims agent, if there is one. It depends on the Chapter 11 case. If there is a claims agent, there will be a website with the information needed to file a claim. If not, then you will want to check the Court's docket via pacer.gov to see if there is a deadline set for filing claims and further instructions. You can also contact the Bankruptcy Court help desk for specific information about the case, see https://www.deb.uscourts.gov/court-info.

If your claim is for wages as an employee of the Debtor (the company that filed bankruptcy) you can assert a priority wage claim under Bankruptcy Code 507(a)(4) up to about $15,150 (the amount could be less and depends on when the bankruptcy case was filed). Any amount over this cap is a general unsecured claim.

Make sure you file a proof of claim immediately.

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James L. Arrasmith
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Answered
  • Bankruptcy Lawyer
  • Sacramento, CA
  • Licensed in California

A: In this scenario, since the company has filed for Chapter 11 bankruptcy in Delaware, it means they are undergoing a reorganization process to restructure their debts and assets. As a creditor owed unpaid wages, you have the right to file a claim with the bankruptcy court. You should gather all relevant documentation, such as pay stubs and employment contracts, to support your claim.

However, it's important to understand that in a Chapter 11 bankruptcy, creditors often receive only a portion of what they are owed, and the payment is typically based on the priority of their claim. Wage claims are generally considered priority claims, which means they are given higher priority for payment compared to other types of debts. However, the exact amount you may receive depends on various factors, including the company's available assets and the outcome of the bankruptcy proceedings.

As for collecting fees, if you are successful in proving your claim for unpaid wages in the bankruptcy court, you may be entitled to recover the unpaid wages owed to you. However, the recovery of any additional fees or damages beyond the unpaid wages may depend on the specific circumstances of your case and applicable bankruptcy laws. It's advisable to consult with a bankruptcy attorney who can provide you with guidance tailored to your situation and help you navigate the complex bankruptcy process.

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