Message-ID: <9045041.1075855360067.JavaMail.evans@thyme> Date: Fri, 30 Nov 2001 08:42:45 -0800 (PST) From: andrew.clark@weil.com To: michelle.cash@enron.com Subject: Re: Mime-Version: 1.0 Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: 7bit X-From: andrew.clark@weil.com@ENRON X-To: Cash, Michelle X-cc: X-bcc: X-Folder: \Michelle_Cash_Jan2002\Cash, Michelle\Inbox X-Origin: Cash-M X-FileName: mcash (Non-Privileged).pst As discussed: What happens to my wages/salary if the Company files for bankruptcy protection? The general rule is that a company that has filed a banruptcy petition is not able to make payments on any prepetition debts until a plan of reorganization is filed. However, there are certain exceptions to the general rule. Claims related to wages and salary earned within 180 days of a bankruptcy petition filing (called "prepetition wages and salaries") receive a special priority for upt to $4650 under the bankruptcy code (section 507(a)(3)) and are usually paid in full as part of the plan of reorganization. Most companies that intend to continue operating while in bankruptcy recognize the need to keep employees working and the potential hardship that would occur of wages were not paid or delayed. As a result, most companies that file a bankruptcy petition, but which inetend to remain in business, seek the specific authority of the bankruptcy court to make payments on the priority wage claims immediately so that employees will experience little or no disruption in their wage/salary payments while they continue working. Usually this authority is sought at the same time or shortly after a bankruptcy petition is filed. For a company that derives a great deal of its value from its employees, making sure these payments are made in a timely manner is a high priority. **********NOTE********** The information contained in this email message is intended only for use of the individual or entity named above. If the reader of this message is not the intended recipient, or the employee or agent responsible to deliver it to the intended recipient, you are hereby notified that any dissemination, distribution or copying of this communication is strictly prohibited. If you have received this communication in error, please immediately notify us by telephone (212-310-8000), and destroy the original message. Thank you.