What happens to employees in a chapter 11 bankruptcy?

Answer 1

Unchanged from before. That isn't to say you won't experiences changes, maybe even loss of work/job. But the BK involves creditors and may change their rights, employee rights, to safe workplace, etc. aren't involved. You never had a right to employment...US employees are employees at will..of the employer.

Answer 2

I've been involved with several. Most simply, there is no hard and fast rule. C-11 evolve many ways. Some are simply financial re-organizations, but more and more they begin to look like C-7 with dissolution of the Company by the end. And of course, anything in the middle too. Even when the corporation dissolves, that may, that does NOT mean the end of your job...likely large job losses along the way, sure...but if a division or operation gets sold off, depending on to whom and what it does, it may actually be very good for some and loss of job for others. For example, accounting and management become redundant with the new owner...but the guy running the equipment...he may well find he now works for a much more stable employer that is able to expand the product lines he works on. It simply depends. Your payroll (but not all your benefits, which may go through changes), are pretty well secure through the BK process.

Answer 3

Companies that file for bankruptcy still have to pay their employees, if they have enough money. Employees are prioritized during bankruptcy procedures, so the company will have to pay for their work.

Answer 4

Assuming you are talking about the employer filing bankruptcy, it depends on the kind of bankruptcy. If a Chapter 7, they are screwed. If a Chapter 13 (not a corporation) or 11, it will depend on the plan. Downsizing is not unusual, and stripping of pensions is not unusual either.