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Laid-off Circuit City workers could lose pay (unsecured creditors ask court)

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underpants Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Dec-05-08 06:32 AM
Original message
Laid-off Circuit City workers could lose pay (unsecured creditors ask court)
Edited on Fri Dec-05-08 06:32 AM by underpants
Source: Richmond Times-Dispatch

Nearly 600 employees laid off by Circuit City Stores Inc. last month could be stripped of their pay and benefits if a group of creditors gets its way at a hearing today.

The committee representing Circuit City's unsecured creditors has asked a federal bankruptcy court judge in Richmond to cease payroll payments and benefits for those employees let go from the Henrico County-based consumer-electronics retailer's corporate headquarters.

Paying "employees who are not providing any services or value to ongoing business unnecessarily reduces liquidity critically needed for existing operations and pursuing a successful reorganization or sale," the creditors wrote in court papers.

Circuit City spokesman Bill Cimino said yesterday that the company is working diligently to ensure the employees will continue to be paid.

Read more: http://www.timesdispatch.com/rtd/business/local/article... /



At issue is money paid to employees under the federal Worker Adjustment and Retraining Notification Act.

If a company is forced to lay off workers without the warning, then the business is on the hook to pay 60 days of salary and benefits, even if the employees no longer are working for the company, she said.

This was the case for Circuit City.




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Randomthought Donating Member (388 posts) Send PM | Profile | Ignore Fri Dec-05-08 06:59 AM
Response to Original message
1. Creditors committee?
Who are these people? I would like to know who is willing to screw people that badly. Unsecured creditors makes me think services rather than manufacturers.
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Romulox Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Dec-05-08 08:51 AM
Response to Reply #1
6. Bankruptcy. This is what will happen at GM too... nt
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Hugin Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Dec-05-08 07:06 AM
Response to Original message
2. Too bad... Unsecured creditors go to the back of the line.
As it should be.
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Romulox Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Dec-05-08 08:50 AM
Response to Reply #2
5. Employees who are owed wages are ALSO unsecured creditors...
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madrchsod Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Dec-05-08 07:13 AM
Response to Original message
3. yes unsecured creditors get what ever is left
federal law trumps unsecured creditors
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DBoon Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Dec-05-08 08:49 AM
Response to Original message
4. republican class war in action
they take what belongs to them and what belongs to you as well
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