Corporate Bankruptcy- How It Affects Employees
Author: Peter Gitundu
There are mainly two chapters under which a bankrupt company can file a financial distress case. These are chapter 7, also known as the liquidation chapter or chapter 11 which allows the company in debt to pay as they continue operating. When a corporate insolvency petition has been filed under chapter 11, the court appoints an official who takes up the responsibility of making financial decisions in the company while the managers continue with the day-to-day running of the company.
Corporate bankruptcy filed under chapter 11, gives the company a chance to reorganize as they pay their pending debts. There are proposed changes in the company financial distress petition. These are under the Bill C-55. Claims for unpaid wages and vacation pay will be given first priority. Presently secured creditors are given first priority, followed by unsecured creditors. This change will be enacted under the Wage Earner Protection Program, WEPP.
The WEPP, which will be under the ministry of labor and housing, was formed to compensate workers who have not received their monthly payments and vacation pay six months prior to the filing. This bill intends to protect workers under their umbrella in case their company decides to declare insolvency. This bill also seeks to protect employees retirement benefits and any retirement plans that the employee could have in case the company became insolvent. Any such retirement plans will be given priority above the secured creditors.
Corporate bankruptcy will also protect the contracts of the employees. The debtor company will have to serve the court with an order that, in order to restructure they might need to cut down the number of employees. The company has to convince the court that this step will help them come out of debt.
Article Source: http://www.articlesbase.com/personal-finance-articles/corporate-bankruptcy-how-it-affects-employees-920590.html
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With my BF having a Bankruptcy would we get an Apartment?
We have applied for it and just waiting to hear back. I have had my job for 2 years and he has had his for one. Income requirement is 2 times, we make 5 times the rent, I have 7 years excellent rental history, he has none. My credit score is 600. My BF’s credit score is about 650. He had a bankruptcy discharged August of 08. He was a home owner and he and his wife of 8 years divorced. He bought a car 3 months ago and is making payments. We understand we might pay a huge deposit but were ok with that. They want to give us the 1st month off of Rent and a payment plan for the deposit. They can not make exceptions and are a corporate rental company. The unit they want to give me has been empty a long time. They said I can put 100 down to reserve it but it was open when I applied a month ago and still is.They cant give it to us until were approved
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In normal times you would have trouble renting the apartment. But most complexes are half-empty today. You will get the apartment. You are correct that you might have to pay a big deposit. Don’t give them any money until you are 100% approved. Giving them money gives them leverage when negotiating with you. You should be treated like a valued customer..
n this economy, people with good credit can barely get a loan. People with bad credit are SOL. It’s people with bad credit which banks gave out loans that they knew might not get paid back, which got us into this mess.
Wait till the credit market thaws, then try.