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Court Approves WARN Act Claims For Over 700 Former Employees of Truland Electric

11.12.15

CONTACT:
Pamela McCarthy
215 569 2297

FOR IMMEDIATE RELEASE – November 11, 2015

On Tuesday November 10, at the Final Fairness hearing in Alexandria, Virginia, the Court approved a settlement of WARN Act claims for over 700 former employees of Truland Electric. It is the first settlement of its kind nationally because it gives administrative priority status to a portion of the employees’ WARN Act damages.

This was the direct result of a precedential opinion rendered by the Court earlier in the litigation holding that the WARN Act damages should be given administrative status because the violation ran into the post-bankruptcy filing period. It is a legal argument that many plaintiffs’ WARN Act lawyers have posited for numerous years, but Judge Brian Kenney’s opinion was the most extensive and favorable on the issue.

The total settlement is a:

• $2.0 million administrative claim;
• $3.5 million wage priority claim; and
• $10 million general unsecured claim.

Counsel for Class, Charles, A. Ercole, a partner and Chair of Klehr Harrison Harvey Branzburg’s Labor and Employment practice group, said the case and settlement are significant legally and will likely impact other WARN Act cases around the country.

Mr. Ercole also said, “it is a very good result under the circumstances of this bankruptcy. Mass layoffs and sudden shutdowns have a tremendous impact – financially and emotionally – on employees and their families. This settlement insures that to the extent money is recovered by the Trustee, employees are guaranteed to share in that recovery.” (Mr. Ercole noted that given the current financial status of the Estates, the total amount and timing for payments is very difficult to predict).