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Clawback of Severance in Bankruptcy

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  • 11-30-2009, 11:29 AM
    Ironman
    Clawback of Severance in Bankruptcy
    My question involves bankruptcy in the state of Texas:

    I worked for a privately held firm for 4 yrs. My business unit was autonomous from the primary functions of the firm. I do not know if my unit was profitable. Early in my 5th yr, I and a number of others were downsized in a cost saving effort and all paid severance. 10 months later the firm was shut down by the U.S. govt, declared bankruptcy and charged with selling illegal investments. The bankruptcy receiver is now suing those of us who received severance to clawback our severance. What is the likely course and outcome of this suit and is there any precedent in clawback lawsuits that I could research?
  • 12-02-2009, 08:14 AM
    Mr. Knowitall
    Re: Clawback of Severance in Bankruptcy
    It's possible for the receiver to claw back severance pay. I don't have enough information to tell you if the receiver's claim has any merit in this particular case.

    You can research case law for free on Google Scholar, or through sites like LexisOne (ten years of free case law, with more complete packages available for a fee, and a more powerful search feature).
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