Company went bankrupt, what are the chances employees will ever get paid?

A company recently closed due to bankruptcy and didn’t pay employees a month’s worth of hourly wages. What’s the chance employees will actually see those back wages?

Did they file for reorganization or chapter 7 bankruptcy? I worked for a company that filed chapter 7 in July, and there was no money left to pay us. The company had $25k in the bank for 1,100 people, and they owed $970 million. Even the lawyers are leaving since there’s no money to pay them.

@Hollis
I’m not sure yet. We’re still waiting to hear from the Department of Labor. This situation was on the news, and all of us employees are in the dark about most of it. I just wanted to get an idea of what others think. Thanks for your input.

@Ira
In our case, we didn’t hear from anyone. There were multiple filings with the Department of Labor because the company didn’t submit insurance premiums they deducted from employees and delayed 401k submissions. Be careful about medical claims. Best advice is to check with the bankruptcy court in the state the company was registered. You can usually do that online.

If the company filed for bankruptcy, you’re pretty much out of luck. You should be listed as a creditor and hope to get something from what’s left of the company. Unpaid wages are usually treated as priority unsecured debts, so they get paid before other debts. You’ll want to file a Proof of Claim with the court to be eligible for any distribution to creditors.

@Jay
Exactly this ^^^

@Jay
Thanks for the response, I’ll definitely look into it.

Ira said:
@Jay
Thanks for the response, I’ll definitely look into it.

Have you applied for unemployment?

yego said:

Ira said:
@Jay
Thanks for the response, I’ll definitely look into it.

Have you applied for unemployment?

That’s another issue. I tried, but I found out someone fraudulently tried to open an unemployment claim in my name during Covid. I had to file a fraud claim and couldn’t proceed. Luckily, a new company took over my site and hired me back within two weeks. I’ve been back at work for a month now.