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Anyone have experience with a bankrupt company owing you money?


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I subcontracted a job from a local construction company that went bankrupt less than a month later, and before we got paid. Looking over the list, the sheer number of claimants made my head spin. Looking at the amounts owed nearly made me experience vertigo. There were five pages of claimants, and just counting the ones with 5 digits or more added up to well over 1.5 million. Our claim is small potatoes, only 1500 bucks, whereas the folks that introduced us to this developer are owed over 140,000 and they're far from the largest creditor. The girl that introduced us said there are business owners losing their houses over this, due to having own liabilities that they can't cover. A crazy chain reaction seems to be taking place. A nice Christmas present as they filed for bankruptcy on the 19th of December, and a hell of a way to start the new year.

I wonder what my expectations should be in regards to collecting. Do employees have precedence before creditors for money owed? Do larger creditors have precedence before smaller ones like my partner and me? Company assets amount of a little over a million, or probably about 1/2 of the total amount owed. Are settlements proportional to what's left in the company (awkward phrasing, basically will we collect half because the company only has enough to cover half the overall debt)?

The company is intending to go through a restructuring process and I don't think they're shutting for good. They're still completing their outstanding projects and, presumably, employing people. I've not had a chance to get in touch with the trustee company that is handling the case, will hopefully Monday, but I'd like to get an idea of what's in store as it's the first time we face this predicament.

Any info is very welcome.

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I'd consider myself lucky it's not more than $1500.

I do.

What sucks is we are planning to move from residential services to more commercial subcontracting and this was our first foray into the construction industry. We were going to get some solid references, had two more projects lined up around the end of the month, things were looking good! Now it's back to square one.

What do you think, should we bid on the projects they're still completing? :lol:

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Are you an employee of the company that has filed for bankruptcy or are you a self employed subcontractor? That is an important distinction. You say you subcontracted a job - that is confusing language. If you are a self employed subcontractor you are going to be on the list of creditors along with every other supplier and good luck seeing a dime. if you were an employee you have some options. You can contact a labour lawyer and ask for advice. You can also contact the labour relations board and ask them what they can do for you. Good luck.

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Are you an employee of the company that has filed for bankruptcy or are you a self employed subcontractor? That is an important distinction. You say you subcontracted a job - that is confusing language. If you are a self employed subcontractor you are going to be on the list of creditors along with every other supplier and good luck seeing a dime. if you were an employee you have some options. You can contact a labour lawyer and ask for advice. You can also contact the labour relations board and ask them what they can do for you. Good luck.

We're an incorporated business that provided labour. Sounds like we may be SOL. At least our costs were about 500 bucks including employee wages and supplies. And our own time of course.

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I subcontracted a job from a local construction company that went bankrupt less than a month later, and before we got paid. Looking over the list, the sheer number of claimants made my head spin. Looking at the amounts owed nearly made me experience vertigo. There were five pages of claimants, and just counting the ones with 5 digits or more added up to well over 1.5 million. Our claim is small potatoes, only 1500 bucks, whereas the folks that introduced us to this developer are owed over 140,000 and they're far from the largest creditor. The girl that introduced us said there are business owners losing their houses over this, due to having own liabilities that they can't cover. A crazy chain reaction seems to be taking place. A nice Christmas present as they filed for bankruptcy on the 19th of December, and a hell of a way to start the new year.

I wonder what my expectations should be in regards to collecting. Do employees have precedence before creditors for money owed? Do larger creditors have precedence before smaller ones like my partner and me? Company assets amount of a little over a million, or probably about 1/2 of the total amount owed. Are settlements proportional to what's left in the company (awkward phrasing, basically will we collect half because the company only has enough to cover half the overall debt)?

The company is intending to go through a restructuring process and I don't think they're shutting for good. They're still completing their outstanding projects and, presumably, employing people. I've not had a chance to get in touch with the trustee company that is handling the case, will hopefully Monday, but I'd like to get an idea of what's in store as it's the first time we face this predicament.

Any info is very welcome.

Don't hold your breath, I have been waiting over five years for severance pay I am owed. Owners of big companies love to play the shell game, all the secured creditors owned by the same company so they pay themselves off, file for bankruptcy and leave the workers and outsiders holding the bag.

That company wouldn't happen to be part of the Buchanan group would it?

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Sounds like you're SOL. My understanding (from having worked in the debt-collection industry a long time ago) is that any unpaid salaries get covered first and then creditors gets settled proportionally.

Usually, though, it's more of a hassle to get the money than it's worth.

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You'll be lucky to get a few cents on the dollar back. I got burned about $1100 on a purchase from a company that went bankrupt a year ago. I got papers to fill out from the law firm handling the case. I'm not expecting much back maybe .10 on the dollar. Some people lost tens of thousands, one guy over $300,000.

Once bankruptcy happens it takes over a year to get things settled. I'm still waiting as it'll be a year sometime next month.

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I subcontracted a job from a local construction company that went bankrupt less than a month later, and before we got paid. Looking over the list, the sheer number of claimants made my head spin. Looking at the amounts owed nearly made me experience vertigo. There were five pages of claimants, and just counting the ones with 5 digits or more added up to well over 1.5 million. Our claim is small potatoes, only 1500 bucks, whereas the folks that introduced us to this developer are owed over 140,000 and they're far from the largest creditor. The girl that introduced us said there are business owners losing their houses over this, due to having own liabilities that they can't cover. A crazy chain reaction seems to be taking place. A nice Christmas present as they filed for bankruptcy on the 19th of December, and a hell of a way to start the new year.

I wonder what my expectations should be in regards to collecting. Do employees have precedence before creditors for money owed? Do larger creditors have precedence before smaller ones like my partner and me? Company assets amount of a little over a million, or probably about 1/2 of the total amount owed. Are settlements proportional to what's left in the company (awkward phrasing, basically will we collect half because the company only has enough to cover half the overall debt)?

The company is intending to go through a restructuring process and I don't think they're shutting for good. They're still completing their outstanding projects and, presumably, employing people. I've not had a chance to get in touch with the trustee company that is handling the case, will hopefully Monday, but I'd like to get an idea of what's in store as it's the first time we face this predicament.

Any info is very welcome.

Unfortunately you're likely last in line, or close to it. Secured creditors - banks and other institutions that gave the company money in exchange for some kind of security (e.g. a mortgage) - will have first crack. Most businesses have secured creditors so that'll likely take up most of the cash. Then you'll have to fight with the unsecured creditors over whatever's left over, if anything. At best you'll probably get a few cents on the dollar.

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