Fortunoff – $340,000 Settlement
On February 12, 2009, we filed suit against Fortunoff Holdings, LLC, Fortunoff Card Company, LLC, NRDC Equity Partners, LLC and NRDC Fund V, LLC (collectively Fortunoff), seeking to recover 60 days wages and benefits for former employees under the Worker Adjustment and Retraining Notification (“WARN”) Act and the NY WARN Act. We contend Fortunoff ordered mass layoffs on or about February 12, 2009 without providing its employees with advance written notice. The Case is pending in the United States Bankruptcy Court for the Southern District of New York.
On October 1, 2009, the Court converted Fortunoff from a chapter 11 bankruptcy to chapter 7, and a Trustee was appointed.
In 2011, a WARN class settlement in the amount of $1.8 million was reached with the Trustee, which the Court approved at the Final Fairness hearing on December 16, 2011.
In February 2020, the Court held a hearing on the Trustee’s final report for the Fortunoff Estate, which reflected a total projected distribution of only 20% to creditors with administrative expense claims, including the WARN class (and zero distribution to lower priority creditors). Accordingly, the WARN class settlement of $1.8 million was reduced to $340,000, inclusive of attorneys’ fees, expenses, and service payments.
On August 14, 2020, the Trustee mailed the class members their pro rata share of the settlement, net of class counsel’s fees, service payments and applicable payroll withholdings.
Generally, the WARN Act requires companies to provide their employees with 60 days written notice in advance of a mass layoff or plant closing. In the absence of such notice, employers may be liable to each affected employee for 60 days wages and benefits.
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