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Mad Doc Grotsnik wrote:How do you know that Ensis? Or are you just assuming based on seemingly nothing?

If these people are entitled to serverance pay, and holiday pay already accrued, damn right they should receive their due.

And banning on language other than for 'official' work is a breach of human rights, thus hardly illegal.

banning languages is one of many differences between the civilian and military jobs... should you join any of the US military branches, you are required to speak English, except in a foreign nation, when dealing with local nationals in their native tongue. So, should you emigrate from a country that doesnt speak English, and join the military you will need at least a passing knowledge of the language and be able to speak it, though they still offer English training for those who's native tongue is other than English... These people often times get whats commonly called "Language Pay", in that they speak both English and another, mission essential language.

in all civilian jobs i have held, about the closest thing to a 'contract' i have had, was the document you sign after reading through the "employee handbook" to show that you have read and understood the items outlined in said document. beyond that, they didnt require you to speak Spanish (or any other language), but they did require you to speak English, because its the most common language in the country. you cant very well work in any sort of social environment if you cant communicate effectively.

In the OPs case, i would not be surprised one bit if some workers were there illegally. i am not saying they were, as its entirely possible they are working under a visa, and it expired and they didnt notice (because naturally these things arent at the front of your mind). Undoubtedly, the employer in this situation did outline their expectations of conduct, etc. as well as the terms of work to the person before hiring them, and so may owe the workers something as a result of them losing their jobs. The little TV news i see out here, they were talking about how "fishy" the manner in which the company closed its doors/kicked the workers out of job was. Some anchors gave voice to suspicions that the way they closed down, they did so explicitly in that manner, so as to NOT have to pay the employees a single cent.

Does anyone know if the company is still making anything, shutdown, or out of business? I haven't really heard anything about the actual state of the business itself, which might help further help my understanding of the situation.

According to NPR, the company has shutdown. They attempted to borrow money to continue operations, but no banks extended them credit due to their declining sales.

On a side note, I think the fed is looking around and wondering why it dumped a bunch of money into banks since they're not lending right now. In this case, if sales have been declining for a few months, but they do almost every fall (which wouldn't surprise me - how many people in Chicago put on new doors and windows in winter?), and the company has hard assets to take a secured loan - that is a much different picture than the banks not loaning a failing business any money.

And on a side, side note. I don't understand why language has anything to do with this. In a lot of places, the Mexicans (legal or illegal) are the ones doing all the work while a number of US citizens live on welfare or refuse to work because it doesn't pay what they want it to. Or they commit fraud and other crimes to support themselves.

I have no problem with employees demanding what they're entitled to - severance, vacation days, whatever. But, if they're staging a sit-in to get their jobs back, I hope they're negotiating to take a pay cut to reopen the doors. Most employees are considered 'at will' employees, which means the employer or employee is free to leave at any time. Union employees can (although rarely are) fired for poor performance, but then have an avenue to file a grievance (the union). Union contracts do not prevent employees from leaving the firm, and they may or may not stay in the union.

They are a construction oriented OEM. Would YOU lend money to company that makes construction items for housing? Even secured, thats a craptacular transaction (and likely the assets already pledged the RT or were pledged to something else). Most banks are not factors and lending into housing related industries is strictly a career ending event right now.

dietrich wrote:I don't understand why language has anything to do with this.

You had me then...

dietrich wrote:In a lot of places, the Mexicans (legal or illegal) are the ones doing all the work while a number of US citizens live on welfare or refuse to work because it doesn't pay what they want it to.

you lost me. There are slackers on both sides, and hard workers on both sides. The couter to an overly simplistic argument isn't to be overly simplistic, just in the opposite direction.

Frazzled wrote:They are a construction oriented OEM. Would YOU lend money to company that makes construction items for housing? Even secured, thats a craptacular transaction (and likely the assets already pledged the RT or were pledged to something else). Most banks are not factors and lending into housing related industries is strictly a career ending event right now.

So is the company defunct? If it is gone, how can a company with no money and out of business be reasonably expected to pay people wages? I don't think the Bank Bailout was to prop up un-profitable business to pay people to do no work.

Has everyone lost their jobs or just factory workers? If the company is actually gone belly up the lay-offs would have been more then just the ones on TV.

From these statements it looks like the entire company is in liquidation-not just bankruptcy but liquidation:

The company closed last week with just a few days' notice and about 200 workers want their severance and vacation pay.

Bank of America (as Republic's creditor) now owns the company's assets. That, says Fried, makes them responsible. "These workers are owed their vacation pay and if this factory continues to stay closed, then they're owed 60 days' pay under the WARN Act."

That could explain a lot-the Company literally might not have any money.

I bet the high-ups who ran the company into the ground still got their paychecks.

Yes they had contracts.

lord_blackfang wrote:I bet the high-ups who ran the company into the ground still got their paychecks.

And depending upon the laws of the State of Illinois and the type of company, the higher-ups might be paying off large debts for 20 years.

Frazzled wrote:They are a construction oriented OEM. Would YOU lend money to company that makes construction items for housing? Even secured, thats a craptacular transaction (and likely the assets already pledged the RT or were pledged to something else). Most banks are not factors and lending into housing related industries is strictly a career ending event right now.

When did sales start to decline? Did they historically have lower sales at the end of the year? Why did sales decline? Did they try to get into another industry and overextend with new machinery costs? And I don't know what the Chicago area housing market is even like right now. I don't blame the banks for not lending them capital, but I also don't know enough about the situtation and the financial condition of the company to say if it looks like a good or bad decision. And did they go to one bank or shop around?

The feds are looking really bad for the whole bailout. Banks still aren't lending. Which just shows that Congress doesn't know what they're doing. We don't want banks to make more bad loans. So, why give them extra money at this time? To quote Emmitt Smith, Congress debacled this one.

Ahtman wrote:you lost me. There are slackers on both sides, and hard workers on both sides. The couter to an overly simplistic argument isn't to be overly simplistic, just in the opposite direction.

You're right, I went outta line.

If the employees had contracts, and the company is now bankrupt, wouldn't they become creditors like other entities (suppliers, property owner, utilities)?

Good Q. They'd be unsecured though and would likely get a Chris Farley "JACK!!! SQUAT!!!"

Generally, in the UK, Employees of a bankrupt company become 'preferred debtors' meaning they are the first to get their pound of flesh.

OF course, in the US it's probably different, but it's hard nosed bastard that would deny a working family their wage!

You're assuming they have any cash. Good question though. They're definitely not to the same level of secureds. I wonder if they do have any sort of preference.

They might not have Cash, but the liquidation (selling off of material wealth to get it into Cash) ought to go some way. Just a shame the workers have to wait to get theirs, but sadly thats largely unavoidable.

Mad Doc Grotsnik wrote:Generally, in the UK, Employees of a bankrupt company become 'preferred debtors' meaning they are the first to get their pound of flesh.

That's awesome. In Slovenia, employees get their money last (ie. usually never) and executives aren't accountable for anything.

well, it's highly unlikely that any shareholders, board members, or officers will be held liable. It's called "piercing the corporate veil," and it's hard because corporations exist primarily to avoid exactly that sort of personal liability for the corporations activities. Now, if the officers were committing illegal acts, or even were self dealing, there is a chance. But if they were just a failed business, that's not illegal.

I'd imagine most of the big assets are collateral for large loans on which they've defaulted. The major assets will simply go to those creditors that have the secured right to them, and the rest will be split. The workers will be lucky to get anything, unfortunately.

Polonius wrote:well, it's highly unlikely that any shareholders, board members, or officers will be held liable. It's called "piercing the corporate veil," and it's hard because corporations exist primarily to avoid exactly that sort of personal liability for the corporations activities. Now, if the officers were committing illegal acts, or even were self dealing, there is a chance. But if they were just a failed business, that's not illegal.

I'd imagine most of the big assets are collateral for large loans on which they've defaulted. The major assets will simply go to those creditors that have the secured right to them, and the rest will be split. The workers will be lucky to get anything, unfortunately.

The big one in this case is if the company continued to trade while they knew they were insolvent. If that’s the case then it is possible to look past the veil and start going after the assets of senior executives. It’s a big ‘if’ though, as you have to establish the company was insolvent, that senior executives knew about it, and that additional debts were taken on in this time.


I had a look around but I can’t spot anything in US law for giving workers precedence in securing backpay, holiday pay and severance pay. It’s common in a lot of countries around the world, but for the most part it’s been legislated in the last 20 years. The US has not been a great place for worker’s rights in that time, so I guess it’s unlikely they’ve got similar legislation.

sebster wrote:
The big one in this case is if the company continued to trade while they knew they were insolvent. If that’s the case then it is possible to look past the veil and start going after the assets of senior executives. It’s a big ‘if’ though, as you have to establish the company was insolvent, that senior executives knew about it, and that additional debts were taken on in this time.


I had a look around but I can’t spot anything in US law for giving workers precedence in securing backpay, holiday pay and severance pay. It’s common in a lot of countries around the world, but for the most part it’s been legislated in the last 20 years. The US has not been a great place for worker’s rights in that time, so I guess it’s unlikely they’ve got similar legislation.

I'm not sure what you mean by trading after they knew they were insolvent. If you mean they were trading in stock of the company when they knew the company was going under, then yes, that's insider trading and a big no no. Of course, the only thing the SEC tries to get back there is the profits from any transactions. It's not really piercing the veil because your going after their actions as individuals, not agents of the corp.

If you mean them trying to keep the pretense of being in business to defraud creditors, well, that's peircible. Good luck establishing that, however.

I'm pretty sure workers get the same slide of pie as any other non secured creditor: most likely bupkis.

Polonius wrote:I'm not sure what you mean by trading after they knew they were insolvent. If you mean they were trading in stock of the company when they knew the company was going under, then yes, that's insider trading and a big no no. Of course, the only thing the SEC tries to get back there is the profits from any transactions. It's not really piercing the veil because your going after their actions as individuals, not agents of the corp.

If you mean them trying to keep the pretense of being in business to defraud creditors, well, that's peircible. Good luck establishing that, however.

I mean continuing to trade while you know the company is insolvent, normally in an effort to trade out of difficulty and back into a solvent position. It's a common cause for piercing the veil in Commonwealth countries, though very hard to establish. I had assumed this was the same in the US, but may well be wrong.

sebster wrote:

Polonius wrote:I'm not sure what you mean by trading after they knew they were insolvent. If you mean they were trading in stock of the company when they knew the company was going under, then yes, that's insider trading and a big no no. Of course, the only thing the SEC tries to get back there is the profits from any transactions. It's not really piercing the veil because your going after their actions as individuals, not agents of the corp.

If you mean them trying to keep the pretense of being in business to defraud creditors, well, that's peircible. Good luck establishing that, however.

I mean continuing to trade while you know the company is insolvent, normally in an effort to trade out of difficulty and back into a solvent position. It's a common cause for piercing the veil in Commonwealth countries, though very hard to establish. I had assumed this was the same in the US, but may well be wrong.

Trading in what? Normally in the US trading means stock trading, but it sounds like you mean "operating as a business." The latter I'm not sure of it's legality here, but the law does seem to be different. I think, but I'm by no means a legal expert, that this sort of behavior would fall under the business judgment rule here in the US. Normally, an officer that makes a decision based on business judgment won't be second guessed by the courts. I think the difference is that Insolvency in the UK is closer to US bankruptcy.

Polonius wrote:Trading in what? Normally in the US trading means stock trading, but it sounds like you mean "operating as a business." The latter I'm not sure of it's legality here, but the law does seem to be different. I think, but I'm by no means a legal expert, that this sort of behavior would fall under the business judgment rule here in the US. Normally, an officer that makes a decision based on business judgment won't be second guessed by the courts. I think the difference is that Insolvency in the UK is closer to US bankruptcy.

Yeah, ‘trading while insolvent’ refers to any company that continues to operate while insolvent. It works to punish executive management teams that assume more debt while the business is insolvent (whether that debt is a new loan, trade creditors or employee pay). From the quick google hunt I performed it seemed to only be law in Commonwealth countries, and not even all of them, and I couldn’t find anything similar in the US.

But we do also have the business judgement rule, and it is a very broad defence here, courts will rarely look any closer when something can be argued as a business decision. However, trading while insolvent cannot use that as a defence. In fact, there is little defence against it, other than ‘I didn’t know we were insolvent’ which is good enough more often than not.

Like the protection of worker’s entitlements mentioned earlier, it seems US law is different to some other places.