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contract claim in bankruptcy

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  • DAW
    replied
    Agreed with the other answers. On the "go to jail" question only, debtors prisons were abolished a long time ago. It someone is going to jail, there is more then unpaid wages involved. I have worked payroll for a long a time, and have a pretty good what the legal third rails are. If I really wanted to go to jail for some reason, I would withhold taxes and not pay them. That could do it if I did it enough. But not paying wages solely for lack of funds means that you get taken to court, the creditors get a judgment, and if there are no assets, the creditors are SOL. All a bankruptcy proceeding does is a "judge" gets temporary control of the assets, and all the creditors submit claims. Then there are a bunch of rules that the "judge" follows to decide how to divvy things up. A BK proceedings by itself would not put anyone in jail

    People go to jail because they broke an actual law (criminal, not civil). I am not saying that it is impossible here, but so far nothing you have said sounds criminal. Payroll people are ALWAYS told that if you cannot pay the taxes, then do not pay the wages either. It is the failure to pay taxes that gets one in serious trouble with the government. Not paying wages is not nothing, but it does not (by itself) end up with jail time. Not in this country (or century) anyhow.

    One last thing. If there is a contract, a local attorney needs to actually read the contract. I understand that is not what you want to hear. But that is Contracts 101. Every single contract law question on every single website on the Internet always gives that as the answer whenever a contract law question is asked. Labor law such as FLSA is not contract law, meaning it is the same answer for everyone. Contract law NEVER trumps labor law. But labor law covers only what it covers. Contract law can (and often does) covers everything else. Meaing read the contract. And you really want to have this done prior the BK judge getting too deep in their proceedings. You cannot make a precise BK claim if you are not very familar with the contract.

    Leave a comment:


  • dkstaub
    replied
    Art, I'm not even sure what you mean when you say that you want to "claim some of these contracts/licenses through the bankruptcy court as a compensation for my lost salaries." If you are saying that you want to be given the specific assets (the contracts/licenses), that is not how a business bankruptcy even works.

    There are assets and there are creditors claims. Unless you are a creditor with a specific lien against a specific asset (say, for example, a loan against a vehicle where you hold the title as a lien), then you get put in with a class of similar creditors. The trustee gets the most money he can from the bankruptcy estate and divides the money among the existing creditors. A creditor can't just "claim" an asset and move ahead of other creditors in his class.

    On the other hand, if you are saying that your employer didn't list the contracts on the schedule of assets he filed with the court, then he can certainly get in trouble if it was intentional.

    It is really hard to even guess about all the relevant details that are omitted.

    In your question, you also say the "His business is in bankruptcy" and later you say "In the next 2 months the company is going to declare is bankruptcy." Those are entirely inconsistent statements. If he is only contemplating bankruptcy, then how could he have done anything wrong? If he has already filed for bankruptcy, then what is he going to "declare" in the next 2 months?

    If you sit down with any attorney familiar with business bankruptcies, he should be able to ask you the right questions and give you an answer, though as cbg said, the answer may be that this is in the gray area.

    Leave a comment:


  • Betty3
    replied
    We don't want to guess & tell you something wrong. There isn't really
    enough info to make an intelligent guess. You really do need an attorney.

    Sorry we couldn't be of more help on this forum.

    Leave a comment:


  • cbg
    replied
    Art, we can provide you with general legal information, but we cannot provide you with specific legal advice. That is beyond the scope of what a message board can do.

    We have no way of knowing whether a repeat offense will put your friend/boss in jail. We don't have anywhere near enough information to gauge that. The law is not as black and white as you appear to think - it's not as simple as if someone does x, y will happen. There are many shades of gray in the middle.

    Leave a comment:


  • Art70
    replied
    Re: Need an attorney

    Thank you Betty.

    1. I thought this is the forum where I can get a professional advise.
    I don't argue the fact that I need to go to attorney before I make a decision.
    2. But the attorney doesn't need to read a contract between the company and the client to answer my first question about the employee delayed compensation as a repeat offense. He was indicted once. Now, if I disclose him, he is facing a second offence. What is the possible charge for that? Jail, fine, or altogether and in what amounts?
    3. About the contracts. Let's say there is a clause prohibiting the third parties to conduct a support. In other words, only the owner of the product can conduct the support.

    Thanks again,

    Leave a comment:


  • Betty3
    replied
    There isn't enough info about the contracts/licenses & the repeat offense etc. to know if your boss would go to jail. You almost need to talk to an attorney to whom you can give complete info to & get his/her opinion. Anytime a contract/license is involved, you almost always need an attorney - the attorney generally needs to read the contracts...

    PS - An attorney would have to tell you what would happen if you claimed the contracts & if there
    is any way around it if he would go to jail.
    Last edited by Betty3; 09-16-2011, 12:53 PM.

    Leave a comment:


  • Art70
    started a topic contract claim in bankruptcy

    contract claim in bankruptcy

    My employer is my friend and I don't want him to go to jail. His business is in bankruptcy as he has many creditors, including former employees whom he owed about 3 months of pay before they left and opened a lawsuit against him. These employees worked for the company for about 1-2 years each. I worked for this company for more than 10 years and the company owes me about 13 months in salaries. In the next 2 months the company is going to declare is bankruptcy. The only valuables the company has is a few current contracts which expire and renewed every year and the licenses for the products these contracts are tied to. I was the only support for these contracts for the past 4 years. Recently, when I raised a question that I want to claim some of these contracts/licenses through the bankruptcy court as a compensation for my lost salaries, he told me that this claim will put him in a jail, as this will be a repeat offence from his side.
    Two questions:
    1)Is this true?
    2) Is there another way to claim these contracts without putting by boss in jail?

    Regards,
    Art.
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