Submitted by K2 on
If a US based company goes into receivership (I think you call it chapter 11), how protected are employee entitlements?
I have read that employee wages and the cost of the chapter 11 process must be paid first while in chapter 11. Does that also apply to any accummulated leave or similar amounts that should have been acrued for?
If the company is eventually sold, then the new owners have to inherit the employee entitlement debt - is this a true statement?
If the company is wound up, then where do these employee enitilements fall in the pecking order? Do they get paid first or last? If last, is it common that there is very little chance of there being anything left over to pay the employees what they are owed?
Thanks for your help