Insight Into Recent Corporate Bankruptcies
According to Frank N. Darras, sometimes, corporate bankruptcy can allow a company to regroup, in other cases, it can leave the “little guy” out in the cold.
Bankruptcy is a complex area of law providing a fresh start to those who file for its protection. According to Attorney Frank N. Darras, America’s Top ERISA Insurance Lawyer, businesses accounted for only about 2% of all bankruptcy filings last year, but the ripple effect has had a tremendous impact on the economy and on employees.
When a company has more debt than it can pay, it files for bankruptcy, receiving legal shelter from its creditors. Recently high profile corporations and brand names have filed for bankruptcy. American Airlines filed for protection from creditors just before the holidays on November 29, 2011 and KODAK filed in late January 2012. In some instances, companies are able to re-group and begin anew. That does not hold true in all cases, leaving “the little guy” (or gal) out in the cold. Most employees working for companies in bankruptcy do not recognize the impact and financial ruin it can cause, says Darras.
“Safeguarding the individual interests of employee-participants of group ERISA plans whose sponsor has filed for bankruptcy is of great concern to the members of the DarrasLaw legal team,” explains Darras. “It is critical to respond in an expeditious manner to protect the rights and benefits of plan participants when severe financial hardship (bankruptcy) occurs.”
ERISA, the 1974 Employee Retirement Income Security Act was passed to watch over employee rights. In a bankruptcy, it is important to ensure that all available legal actions have been taken to preserve pension plan assets of employees. Oftentimes, it is common for employers to hold assets which belong to or are owed to employee plans; to occasionally intermingle those assets with the employer’s own assets, says Darras.
Don’t get caught in the middle of the ripple. If your employer is in bankruptcy protection, get help sooner rather than later, from an expert ERISA counselor, says Darras.