mcdaniel@uiucdcsb.CS.UIUC.EDU (11/27/85)
I'm not a lawyer either, but I have a Business Law text, so . . .
Get a lawyer (please <pleading expression>, I don't want to be held
responsible). I'm posting this primarily to give you some idea of what
might happen.
You are a creditor: the company owes you money.
You have a provable claim: it is certain in amount (a provable claim
is a claim which is permitted to share in the estate).
A provable claim is a necessary but not sufficient condition for a
dischargable claim (a dischargable claim is one that will be barred to
the extent that it is not paid). Among the reasons why it may not be
dischargable: wages earned within 3 months [before, after, or both?]
of filing the petition in bankruptcy; "claims for money of an employee
that had been retained by his employer to secure the faithful
performance of the employment contract"; failure of the bankrupt to
list you as a creditor; various crimes (fraud, for example) or
negligences. Your claim does not appear to be dischargable, because of
the "employee" bit: anything they can't pay you should remain a claim
after bankruptcy is done (though it's unlikely you'd see any such
money, if the company is dissolved).
You are an unsecured creditor: you have no lien or security interest
against any property. (Holding their computer for ransom does NOT
count. <grin>) There are 6 classes of unsecured creditors; each class
is paid in full before anything is paid to the next. There may not be
any preference among unsecured creditors (a technical term with a
precise meaning: it basically means "you get in proportion to your
claim if the pot can't go around"). The classes:
1. Cost of preserving and administering the bankrupt estate: court
costs, receiver, trustee, attorney, and appraisal fees, et cetera. It
ain't the government that's first: remember that lawyers usually make
the laws <grin>.
2. Claims of wage earners, not exceeding $600 to each claimant,
provided the wages accrued within 3 months preceding bankruptcy. Wage
earners include workmen, clerks, servants, salesmen: people dependent
on the bankrupt for support. Claims in excess of $600 are sixth-class
claims, as are wages before the 3-month period. Unclear: if you have
a $700 claim, is it second-class for $600 and sixth-class for $100, or
sixth-class for the whole? I assume the former.
3. Claims for money expended in defending suits against or setting
aside arrangements of the bankrupt debtor -- remember the lawyers in
part 1? <grin>
4. Claims for taxes legally due and owing within 3 years preceding
bankruptcy. Other taxes are sixth-class.
5. Claims for rent granted priority by state statue and any claims
allowed priority by federal law (most federal claims).
6. General creditors ("other").
My guess, depending on the answer to the crucial question in class 2:
administrative fees go first, then you get $600*k for 0<=k<=1 (k==1 if
there's enough money), and then whatever's left over at the end for the
rest; those wages of yours that are unpaid thereafter are not
discharged, but since the company is likely to be dissolved, you aren't
likely to see any such money. I have no real info about the taxes:
could withheld-but-not-paid-to-IRS wages be a legal cause for
preference?
Caveat: the bankruptcy laws were recently changed, so the info above
may be out of date.
------------------
Tim McDaniel; CSRD at the Silicon Prairie
(Center for Supercomputing Research and Development at the University
of Illinois at Urbana-Champaign)
Internet: mcdaniel@uicsrd.csrd.uiuc.edu
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