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WARN - Bankruptcy

Pre-Petition

2011  When WARN Claims Arise. Claims for WARN violations generally arise when the alleged failure to provide a WARN notice occurred. If pre-petition, the usual claims procedures apply. See In re Circuit City (Del. 2011), holding that --

• “For the reasons set forth herein, the Court holds that Plaintiff's claim (if any) resulting from Defendant's alleged violation of the WARN Act arose pre-petition when Circuit City allegedly failed to give the notice required under the WARN Act. Therefore, the Plaintiff's claims should properly be administered through the bankruptcy claims resolution procedure and should not go forward as an adversary proceeding.”

Post-Petition

2014.Aug.15 WARN Claims Revived vs MF Global.  Per Law360, a New York federal judge has reinstated a claims by former employees that MF Global Holdings violated the federal and New York WARN acts, holding that the Southern District’s bankruptcy court erred in dismissing the case.

2013.Aug.23  WARN Act and Bankruptcy - Controlled Group Safe (SD NY).  In the MF Global bankruptcy case, former employees sought WARN Act damages against a broad range of corporate entities on the premise they were a single employer under the Dept. of Labor's 5-prong test (recited in the SDNY's decision). The WARN claims were dismissed under the "liquidating trustee" doctrine, because --

• "In such circumstances, there is no basis for extending liability to the parent or other affiliates; termination of employment results from the commencement of the SIPA proceeding by SIPC, not from any act of the parent or affiliates."