With WARN Act And Bankruptcy, Better Think Inside The Box

By David Wender and Grant Stein (March 13, 2019, 6:37 PM EDT) -- What do you do when you find yourself in bankruptcy after generating over $20 million from a sale of assets with no secured creditor only to be faced with the Worker Adjustment and Retraining Notification Act litigation where the plaintiffs are seeking administrative priority treatment for 100 percent of the alleged WARN Act claims (exceeding $16 million)? Putative class action counsel insists that (1) "class" claims can only be resolved via Rule 23 of the Federal Rules of Civil Procedure;[1] (2) settlements can only be reached with his/her blessing; and (3) the debtors are faced with maintaining outsized reserves to address the potential of allowance of WARN Act claims on a priority basis (delaying material distributions to unsecured creditors)....

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