Scope of Discussion. This publication provides an overview of the employment and labor law issues commonly facing a bankrupt employer. While most businesses file for bankruptcy under either Bankruptcy Code Chapter 7 (total liquidation) or Chapter 11 (business reorganization), the process and the employer’s responsibilities differ under each. If unionized units are involved, the employer will have additional concerns in the bankruptcy proceeding. Also included is a discussion of the unique issues that arise regarding employee protections against discrimination because of bankruptcy, as well as litigation involving a bankrupt plaintiff.

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