I'm suing my employer for retaliation. We go to court in 2 months and now they're filing chapter 11 bankruptcy. What can I do?

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We are scheduled for court on the 14th of November. My employer lied and covered up material facts during EEOC investigation and does not have a chance at winning in court. I was watching the news last week and my employer is filing chapter 11 bankruptcy. Does this mean that they won't have to pay me if I win my case. Is there anything that I can do? Are they allowed to violate civil rights and hide behind bankruptcy?

Attorney Answers

4
Peter Walter WestonBankruptcy AttorneyBellaire, TX ·
If your employer files chapter 11, you become a creditor, and your litigation is automatically stayed, until the bankruptcy court rules otherwise. The employer, as a debtor will provide for all creditor's claims in reorganization by filing a plan of reorganization, or if not successful, will likely go out of business, or all assets may be sold and creditors paid according to their priorities. You appear to be an unsecured creditor, which could receive payment after higher listed priorities are provided for, such as unpaid taxes, secured bank loans and administrative fees. You should receive notices of proceedings, and your attorney can assist you in what may be done as to your litigation, and can also receive notices as being your representative, by making an appearance for notices. If there is a filing, it likely is not because of your dispute, which can continue until the bankruptcy is filed. Whether or not you will have a trial, may be dependent on if the business survives.
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Stephen Trezza ·
File a claim when you receive notice.
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Dheeraj Singhal ·
If your employer was on the news, I assume the company has significant assets coupled with large debts. Like others have said, you would be an unsecured creditor and you will need to file a proof of claim. To make sure you don't end up getting lost in the long line of creditors that has already formed, you should talk to a bankruptcy or employment attorney about filing an adversary proceeding in the bankruptcy case to have the liability excepted from the discharge. I have seen multiple cases in California in which the employer's liability for employment claims is not discharged in the bankruptcy. An adversary proceeding is a lawsuit that is brought within the bankruptcy against the debtor. The adversary proceeding commences with a complaint and proceeds in many ways like a typical lawsuit would in state or federal court. The goal of the adversary proceeding, if you win, would be to make sure that your debt is not washed away with the discharge that the company gets. If you win, you may be able to collect on your judgment against the Debtor as if the bankruptcy had never happened. I would certainly speak with an attorney experienced with these kinds of matters.
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