Durham, NC asked in Bankruptcy and Employment Law for North Carolina

Q: The company I work for is in receivership and clients have cancelled orders because of it. Can I get lost commissions?

The company I work at has been struggling financially for the past few years and went into receivership a few weeks ago. It is likely to be sold as 2-3 smaller companies.

Because of these issues, clients have canceled more than $1.25M in orders, causing me to loose $80,000 in commissions so far. More cancellations might be coming.

I received a letter from the Receiver about submitting claims.

Can I file a claim for those lost commissions?

Also, the investment group that owned the company before receivership might buy the office I work for. If I can file this claim, should I? I don’t want to do this then lose my job later.

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1 Lawyer Answer
James L. Arrasmith
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Answered

A: You can indeed file a claim for the lost commissions as a creditor in the receivership process. When a company goes into receivership, the receiver's role is to manage the company's assets and debts, which includes assessing claims from creditors, including employees who have lost income directly due to the company's financial situation. Your commission losses as a result of cancelled orders directly stem from the company's current financial state, so submitting this claim would be appropriate.

To proceed, follow the instructions provided in the letter from the Receiver about submitting claims. Typically, this involves filling out specific forms and providing documentation to support your claim, such as sales records and communication regarding the cancelled orders. It's important to submit your claim by any deadlines mentioned in the letter to ensure it's considered in the receivership proceedings.

Regarding your concern about potential repercussions for filing a claim, while it's understandable to worry about job security, legally, employees are protected against retaliation for asserting their rights under such circumstances. However, workplace dynamics can be complex, and if the investment group takes over, there's no guaranteed outcome regarding employment. If you have doubts, it may be helpful to discuss this with legal counsel or a trusted advisor who understands your specific situation and can offer guidance tailored to your circumstances.

Timothy Denison agrees with this answer

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