warren@pluto.UUCP (Warren Burstein) (11/13/85)
I would appreciate suggestions for dealing with a job with a company that may soon be dead. What methods are there for extracting back pay? I have heard that in case of bankruptcy creditors get paid before employees. Is this correct? How about taxes, if they deducted taxes from my salary but didn't pay them to the IRS, does this change my status? Am I liable for taxes if this happened? (I guess that my takehome becomes my gross and I then have to pay taxes on that.) What if they give me a W2 form, but it's a lie? Can I be penalized? If so, should I demand proof that taxes marked as deducted on the W2 were really sent? Please respond by mail.
bruceb@amiga.UUCP (Bruce Barrett) (11/19/85)
"What if you company folds?" Answers as I know them (I am not an attorney, go spend $60?? for an hour and find out for sure.): Pay out priorities: 1) Back taxes (funny how those that make the laws get theirs 1st?) I do not know id this includes money "withheld" from you. 2) <I do not recall the term but> "Collateraled investors" Any one who has a peice of company property as colateral for a loan. 3) Employees --- NOT consultants. 4) Other creditors 5) Stockholders. -- Loans fall in there some where but I do not recall where, makbe 3.5 or 4.5 -- If you company is friendly tword you, and already owes you money, and hasn't mortgaged every peice of equipment and office furnature they own you could try to move from catagory #3 to #2. --Bruce Barrett
wendt@bocklin.UUCP (11/21/85)
> 1) Back taxes (funny how those that make the laws get theirs 1st?) > I do not know id this includes money "withheld" from you. > 2) <I do not recall the term but> "Collateraled investors" Any > one who has a peice of company property as colateral > for a loan. > 3) Employees --- NOT consultants. > 4) Other creditors > 5) Stockholders. > -- Loans fall in there some where but I do not recall where, > makbe 3.5 or 4.5 -- You left out the lawyers (if we only could!) Lawyers, the receiver, the receiver's lawyer, the receiver's CPA, (don't laugh, it happened to my folks) and other "court costs" are at 1.5
haral@ttidcb.UUCP (Haral Tsitsivas) (11/24/85)
In article <183@pluto.UUCP> warren@pluto.UUCP (Warren Burstein) writes: >I would appreciate suggestions for dealing with a job with >a company that may soon be dead. What methods are there for >extracting back pay? I have heard that in case of bankruptcy >creditors get paid before employees. Is this correct? It really depends on how the company folds. They can declare Chapter 7 (Liquidation), or they may declare Chapter 11 (Reorganization). Liquidation involves the termination of the business, distribution of non-exempt assets, and usually a discharge of all dischargable debts. Distribution of assets is as follows (in that order): 1. Secured creditors collect on their security interests. 2. Creditors entitled to a priority receive payment in the order provided. 3. Payment is made to unsecured creditors who filed their claims on time. 4. Payment is made to unsecured creditors who filed their claims tardily. 5. Claims for multiple, exemplary or punitive damages are paid. 6. Interest at the legal rate from the date of the filing of the petition is paid on the above claimants. 7. Whatever property remains is distributed to the debtor (probably nothing). The priority for item 2 above is determined as follows: a. Bankrupty administrative costs. b. "gap" creditors (expenses arising in the ordinary cost of business after the commencement of the case and before a trustee is appointed). c. Allowed, unsecured claims up to $2,000 for wages, salaries, or commissions earned within 90 days before the filing of the petition or the date of cessation of the debtor's business, whichever comes first. d. Allowed, unsecured claims for contributions to employee benefit plans arising from services rendered within 180 days before the filing of the petition or the cessation of the business, whichever comes first, but limited to $2,000 multiplied by the number of employees covered by the plan. e. Allowed, unsecured claims up to $900 for consumer deposits. f. Specified taxes owed to governmental units. NOTE: If any of the above are not satisfied in full, then they become general unsecured creditors and share equally with the other unsecured creditors in any remaining assets (i.e. $.30 to $1). --Haral Tsitsivas ...!{randvax, philabs, vortex, trwrb}!ttidca!haral
wmartin@brl-tgr.ARPA (Will Martin ) (11/25/85)
In article <554@ttidcb.UUCP> haral@ttidcb.UUCP (Haral Tsitsivas) writes: >Distribution of assets is as follows (in that order): > >2. Creditors entitled to a priority receive payment in the order provided. > >The priority for item 2 above is determined as follows: >e. Allowed, unsecured claims up to $900 for consumer deposits. Does this mean customer pre-payments, such as for an item on backorder from an already-paid-for order? Thanks! Will Martin UUCP/USENET: seismo!brl-bmd!wmartin or ARPA/MILNET: wmartin@almsa-1.ARPA