Former Fisker Employees Looking For Priority Status In Bankruptcy Fallout

DEC 28 2013 BY JAY COLE 1

Ex-Employees Seeking Priority Status In Allocated Funds For Unsecured Creditors

Ex-Employees Seeking Priority Status In Allocated Funds For Unsecured Creditors

As Fisker was spiralling to it death winding down earlier this year, the company surprised some 160-odd of its workers with sudden layoffs, which in turn led to a class federal lawsuit being filed two days later for unlawful dismissal.

The WARN act (Worker Adjustment and Retraining Notification), basically said that Fisker had to pay 60 days wages for the sudden termination of its employees, while the only payout the company did administer was for unused vacation days.

However, it quickly became apparent that Fisker had no actual resources from which to gain severance, and the 157 workers in that suit were pretty much out of luck when it came to compensation.  As the saying goes, “you can’t get blood from a stone.”

Legal Proceedings Threatened Fisker's Bankruptcy Process

Legal Proceedings Threatened Fisker’s Bankruptcy Process

Now Delaware Online reports that Hybrid Technologies, LLC, the group behind buying out Fisker’s DoE loan, who also seeks to buy Fisker out of bankruptcy has allocated $500,000 for unsecured creditors (of which there are more a 1,000) to split as part of their bankruptcy proposal.

Naturally, the terminated employees would like all of it, as their suit calls for $3.8 million in damages.

The group is seeking priority status in the bankruptcy credit line, which essentially means they would recoup the entire $500,000 allotted.  Naturally, the other creditors aren’t so keen on that and chaos may ensue.

According to Delaware Online:

If a precedent is set in allowing their claims to be considered, any bankruptcy case would be slowed, and resources would be depleted for creditors, attorneys for Fisker argued.

According to a Dec. 23 filing by Fisker, the former employees “threaten the Debtors’ path to consummation of their Plan by asserting meritless priority and general unsecured claims.”

A judge will rule on Fisker’s bankruptcy plan next Friday (January 3rd).

 

Categories: Fisker / Karma

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1 Comment on "Former Fisker Employees Looking For Priority Status In Bankruptcy Fallout"

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The employees will lose. They don’t even have a valid claim in the first place. There is a “Faltering company” exception to the 60 day notice law which absolves Fisker completely.

From http://www.doleta.gov/programs/factsht/warn.htm

“The exceptions to 60-day notice are:

(1) Faltering company. This exception, to be narrowly construed, covers situations where a company has sought new capital or business in order to stay open and where giving notice would ruin the opportunity to get the new capital or business, and applies only to plant closings; “