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Bonus Contract/Chapter 11

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hangingdj

Junior Member
What is the name of your state? New Jersey

I am an Executive Director at a privately owned company in NJ. I signed a contract that agreed to a bonus for remaining employed through 09/01/06. This statement only stipulated "termination for cause" as a potential method of losing rights to the benefit. In June, I was given an 8 week WARN notice that my employment would end (lay off) on 09/01/06 and payment would include the stated retention bonus and company severance plan.

Now, only weeks before the end of August, the company has filed Chapter 11 and is stating that they cannot pay the bonus due. In addition they are claiming they cannot pay any severance as outlined in our corporate handbook. This means I walk away with nothing.

Is there anything I can do to recover some or all of the contract and severance amounts? Do I have to offically file as a "creditor" to whom the business owes money to...how is that done? Can I sue the owner (not the company) to get the money? Am I protected at all under labor laws? HELP PLEASE!
 
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azatty

Member
Bankruptcy law trumps. It's a contract claim, ergo, it can be discharged by the company. Absent some special circumstance (like a collective bargaining agreement), you're probably out of luck. You can file a proof of claim for the amount of the bonus and severance, but whether you will ever get paid depends upon the Chapter 11 Plan that the debtor files.
 

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