WARN (Worker Adjustment and Retaining Notification Act) and Bankruptcy
WARN - is the Worker Adjustment and Retraining Notification Act. It applies to employer that employ 100 or employees who work in the aggregate at least 4000 hours per week (excluding overtime). The provisions of WARN are trigerred by a plant closing or mass layoff.
The 2005 Bankruptcy Amendments created new administrative claim section 503(b)(1)(A)(ii). Court decisions have held that the relevant consideration is when the rights or claims to back pay vest or accrue. That is, if a claim vests prepetition, it is treated as a priority wage claim capped at $10,950 and a general unsecured claim in excess of the cap and if its vests postpetition, it is treated as an uncapped administrative priority claim.
The 2005 Bankruptcy Amendments created new administrative claim section 503(b)(1)(A)(ii). Court decisions have held that the relevant consideration is when the rights or claims to back pay vest or accrue. That is, if a claim vests prepetition, it is treated as a priority wage claim capped at $10,950 and a general unsecured claim in excess of the cap and if its vests postpetition, it is treated as an uncapped administrative priority claim.