We advise on employment issues in bankruptcy including WARN Act compliance, collective bargaining agreement rejection, employee claims, and workforce transitions in distressed situations.
Bankruptcy creates unique employment challenges. MC Law's Employment in Bankruptcy practice helps debtors, creditors, and acquirers navigate workforce issues in insolvency proceedings.
Bankruptcy doesn't eliminate WARN obligations. We advise on notice timing, the faltering company exception, and liability for WARN violations in bankruptcy. We help structure transactions to manage WARN exposure.
Under Section 1113 of the Bankruptcy Code, a debtor may seek court approval to reject or modify a CBA after making a proposal to the union, providing relevant information, and demonstrating the modifications are necessary for reorganization. The process requires good faith negotiation.
Employee wage and benefit claims receive priority treatment up to statutory limits. Priority claims for wages earned within 180 days before filing are capped at a set amount per employee. Claims exceeding the cap are treated as general unsecured claims.
Yes, the WARN Act generally applies to employers in bankruptcy, though courts have debated the scope of the unforeseeable business circumstances exception. Violation claims may receive administrative expense priority, increasing pressure for compliance.
Issues include continuation of health benefits, treatment of pension obligations, retiree benefit modifications under Section 1114, COBRA compliance, severance payment obligations, and assumption or rejection of key employee retention agreements.
Section 503(c) restricts retention payments to insiders and key employee compensation in bankruptcy. Retention payments require court approval and must satisfy requirements showing the transfer is essential and the employee has a bona fide competing offer.
Order attorney-drafted documents related to this practice.
A comprehensive clearance search plus preparation and filing of one federal trademark application.
Clearance, preparation, and filing, plus responses to routine (non-substantive) Office Actions.
Full-service prosecution from filing through registration, including substantive Office Action responses.
A short-form agreement providing a security interest in copyrighted works as collateral for a loan or other financial arrangement.
An agreement used to formalize the termination of a direct hire employee, including provisions for confidentiality, intellectual property, and severance.
A notice sent to a service provider under the Digital Millennium Copyright Act (DMCA), requesting the removal of infringing content hosted on their platform.
A simplified agreement used to transfer ownership of a copyright from one party to another, including details such as rights transferred, payment, and effective date.
An agreement where the copyright owner grants a licensee the right to use the copyrighted material under specified terms, including usage scope, duration, and payment.