First magnus liquidating trust. First Magnus Files Bankruptcy Plan.



First magnus liquidating trust

First magnus liquidating trust

The good news is, the more than 5, former employees nationwide should be receiving about half of what they are owed for their final checks in the next 45 days or so, said Morris C. Aaron, the liquidating trustee for the First Magnus estate.

Beyond that, however, the picture gets murky. In a recent interview, Aaron said he hopes to pay the balance of wage claims by former First Magnus employees within the next six months or so.

But he also said a class-action lawsuit is getting in the way. It was filed by a group of employees against the lender for failing to provide advance notice of a mass layoff, which is required under the federal Worker Adjustment and Retraining Notification, or WARN, Act.

That suit, which was dismissed in bankruptcy court by Chief Judge James Marlar, is under appeal in the U. Both sides are attempting to mediate a settlement. Raisner said that if litigation over the WARN claim is protracted, there won't be much money left to pay anyone.

David Mattull, a former regional production manager for First Magnus in St. Beyond the wage claims, First Magnus' sudden closure left hundreds of former employees scrambling for health insurance, he said. He has picked up with another company in St. Louis, but Mattull said his income is much less than it once was, and he may have to sell his home.

The attorneys always win. What is the status of the wage claims and how much money is available to pay former employees? It's my best estimate right now that the trust should be able to pay percent of the priority wage claims. All the former employees that were terminated are entitled to all of their pre-petition wages that weren't paid.

And at this point in time, we think we should have sufficient funds to pay percent of those employee claims. What's the timeline for the payout? We paid about 5 percent of the wage claims months ago. And I am hoping to make the next distribution in the next 30 to 45 days, which should be at least 50 percent of what's owed. And then I would hope to get the balance of it paid within four to six months. For clarification, when you say 50 percent, are you saying 50 percent of the wages owed to all the employees or payments to 50 percent of the former employees?

We will pay up to about 50 percent of what their total claim was for all of the wage claimants. This is something that I hope doesn't bother people too much, but these were wage claims so we actually have to do withholding and payroll taxes. So it will probably be treated like a regular payroll, but in terms of what they are owed it will get them to about 50 percent.

Why is it taking so long to get these checks out to people? First, there are about 5, wage claims that were filed, and so we had to reconcile all of those claims and make sure we had everybody's claim correct.

A lot of people filed duplicate and triplicate claims. So, from an administrative perspective, it was a high volume of claims. And tracking down people to make sure we had the right information, address, it just took quite a bit of time. But that's just a minor issue.

The WARN Act claimants are creating issues that are making it more difficult for us to distribute the money that we do have today, and that is just one of the factual issues that we are dealing with in the trust.

If we don't get a resolution on this WARN Act, or the WARN Act plaintiffs don't decide just to take a back seat until we pay all of the employees their wages, then they could hold us up for quite some time because they are making demands that we reserve certain amounts of money. You recently filed a suit to recover funds from a number of creditors.

What is that about? Under the bankruptcy code there is a section that refers to preferential payments. And, basically, in the 90 days prior to the bankruptcy filing, if any creditor was paid in preference over another creditor they are required to give that money back to the estate. The estate takes that money and then redistributes it to all creditors based on their pro-rata share of what they are owed.

But if people have received money, and there are defenses to preference actions like ordinary-course payments. I imagine there is going to be quite a bit of push-back on this suit. I am really counting on funds that I am aware of to pay these wage claims, and I think that if the litigation trust is successful in some recovery that will help pay other claims.

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First magnus liquidating trust

The good news is, the more than 5, former employees nationwide should be receiving about half of what they are owed for their final checks in the next 45 days or so, said Morris C. Aaron, the liquidating trustee for the First Magnus estate. Beyond that, however, the picture gets murky.

In a recent interview, Aaron said he hopes to pay the balance of wage claims by former First Magnus employees within the next six months or so. But he also said a class-action lawsuit is getting in the way. It was filed by a group of employees against the lender for failing to provide advance notice of a mass layoff, which is required under the federal Worker Adjustment and Retraining Notification, or WARN, Act. That suit, which was dismissed in bankruptcy court by Chief Judge James Marlar, is under appeal in the U.

Both sides are attempting to mediate a settlement. Raisner said that if litigation over the WARN claim is protracted, there won't be much money left to pay anyone.

David Mattull, a former regional production manager for First Magnus in St. Beyond the wage claims, First Magnus' sudden closure left hundreds of former employees scrambling for health insurance, he said. He has picked up with another company in St.

Louis, but Mattull said his income is much less than it once was, and he may have to sell his home. The attorneys always win. What is the status of the wage claims and how much money is available to pay former employees? It's my best estimate right now that the trust should be able to pay percent of the priority wage claims. All the former employees that were terminated are entitled to all of their pre-petition wages that weren't paid. And at this point in time, we think we should have sufficient funds to pay percent of those employee claims.

What's the timeline for the payout? We paid about 5 percent of the wage claims months ago. And I am hoping to make the next distribution in the next 30 to 45 days, which should be at least 50 percent of what's owed. And then I would hope to get the balance of it paid within four to six months.

For clarification, when you say 50 percent, are you saying 50 percent of the wages owed to all the employees or payments to 50 percent of the former employees? We will pay up to about 50 percent of what their total claim was for all of the wage claimants.

This is something that I hope doesn't bother people too much, but these were wage claims so we actually have to do withholding and payroll taxes. So it will probably be treated like a regular payroll, but in terms of what they are owed it will get them to about 50 percent. Why is it taking so long to get these checks out to people? First, there are about 5, wage claims that were filed, and so we had to reconcile all of those claims and make sure we had everybody's claim correct.

A lot of people filed duplicate and triplicate claims. So, from an administrative perspective, it was a high volume of claims. And tracking down people to make sure we had the right information, address, it just took quite a bit of time. But that's just a minor issue. The WARN Act claimants are creating issues that are making it more difficult for us to distribute the money that we do have today, and that is just one of the factual issues that we are dealing with in the trust.

If we don't get a resolution on this WARN Act, or the WARN Act plaintiffs don't decide just to take a back seat until we pay all of the employees their wages, then they could hold us up for quite some time because they are making demands that we reserve certain amounts of money.

You recently filed a suit to recover funds from a number of creditors. What is that about? Under the bankruptcy code there is a section that refers to preferential payments. And, basically, in the 90 days prior to the bankruptcy filing, if any creditor was paid in preference over another creditor they are required to give that money back to the estate.

The estate takes that money and then redistributes it to all creditors based on their pro-rata share of what they are owed. But if people have received money, and there are defenses to preference actions like ordinary-course payments.

I imagine there is going to be quite a bit of push-back on this suit. I am really counting on funds that I am aware of to pay these wage claims, and I think that if the litigation trust is successful in some recovery that will help pay other claims.

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First magnus liquidating trust

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2 Comments

  1. First, there are about 5, wage claims that were filed, and so we had to reconcile all of those claims and make sure we had everybody's claim correct. We will pay up to about 50 percent of what their total claim was for all of the wage claimants.

  2. In a recent interview, Aaron said he hopes to pay the balance of wage claims by former First Magnus employees within the next six months or so. And tracking down people to make sure we had the right information, address, it just took quite a bit of time. A lot of people filed duplicate and triplicate claims.

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