Question:

Do I have the right to my vacation pay?

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I was laid off in mid May. I, along with about 4 more, received letters stating we would receive severence and our vacation pay. A few weeks later, the company went out of business. We still have not received our severence or vacation, a little over 2 1/2 months later. I was told by someone close to the ower of the comoany that we would not likeley receive what was promised to us. Do we have a right to demand what was promised to us? If, so, what steps should we take? Should we all get together and fight it together, or everyone do it alone?

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  1. If the company is in bankruptcy, you will probably never get the money owed to you.  The bankruptcy courts rank the outstanding debts of the company - rent, secured loans like vehicle loans or mortgages, credit cards, taxes owed but not paid yet, unpaid invoices from vendors, outstanding salary and wages owed to employees, and whatever else the company owes money for.   Bankruptcy courts have a very specific set of criteria they use in determining which debts have to be paid first.  If the company doesn't have enough assets to pay all their debts, then the debts with a lower priority just don't get paid.  Salaries and wages owed to employees, unfortunately, are always a low priority and rarely get paid.  

    If the company has filed for bankruptcy, they have to give the courts a detailed list of all their assets and all their liabilities (money owed to others).  The courts notify everyone on that list of liabilities that the company is bankrupt and lets them know what steps they need to take to preserve their right to be paid.  A lawyer isn't necessary at this point, because you're already on record as being owed money.

    If the company has simply gone out of business, without filing bankruptcy, you're going to need a lawyer to help you figure out whether there is any way possible to get your money.  Some companies (sole proprietorships or partnerships) are legally considered the same entity as their owner, which means that even if the company has gone out of business, the owner of the company can be sued and his personal assets (his home, car, personal bank accouts, etc) can be seized to pay the bills of the company.  

    In a corporation, the people who own the company are separate legal entities; even if the corporation is owned by one person, the corporation is its own legal entity and the things it own don't belong to the person who owns the company, and the money owed by the company isn't a liability for the company's owner as an individual.  This is where an attorney hired by the former employees comes in handy.  They know how to find out what the corporation's ownership was, and can tell you what has to be done in order for the former employees to get paid.

    Bottom line:  Contact the banktruptcy court at the nearest US courthouse (not your county's courthouse, and the nearest bankruptcy court may be in a US courthouse in some other city or state) and ask them 1)  what you need to do to find out if a former employer has filed bankruptcy yet; 2) how to find out if they file in the future; and 3) how to be sure that your name is included on their list of creditors.  If there's no bankruptcy, all the former employees can hire one lawyer to represent all their interests, or each person can go it alone.

    Good luck.


  2. Get all of your letters together from the company and call a laywer.  Go to several laywers that give their first consult free of charge, then pick the one you like the best.

    Good luck!

  3. It would depend on how the company shut down. If they just went out of business and somebody absorbed all of the value then that somebody would be responsible for paying you all back. If they went bankrupt then all value would have been absorbed by their creditors and anyone not being re payed would just have to take the loss.  

  4. All of you shold consult a lawyer. Try and find one that will consult for free for the first visit.

  5. Demand it how?  If they went out of business and declared bankrupcy, they might not have any money to pay you with.  Depending on where you live, you might be able to get a court order that they owe it to you, but that doesn't necessarily mean you get your money.

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