What priority does an employee relocation agreement have when business goes bankrupt?
Question Details: I relocated to Texas for a new job and 6 months after starting the new job the company went bankrupt. Part of the relocation agreement that was part of the job offer was paid by the company prior to bankruptcy and part was not paid at time of bankruptcy (closing costs on sale of home and house hold goods moving expense). What priority in bankruptcy does my claim have to be reimbursed for the rest of my relocation, particularly closing costs on sale of home and household goods moving expense?
Bankruptcy Law Answers
That's a very technical question; I suspect that even a lot of attorneys who do nothing but bankruptcy work would have to research this one.
The key legal question here would be whether those relocation costs are considered part of your earned compensation. If so, then this would have a very high priority, right behind the tax people and in front of anybody else (except, possibly, other employees with direct unpaid-wage claims). If not, then you're an unsecured creditor, part of the big crowd at the end of the line.
If you didn't get a notice about the bankruptcy, including the money due you in the "matrix" of debts, you need to file a notice of claim, and I'd strongly suggest hiring an attorney to do that for you.
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