Question by pandora: If a company files for bankruptcy does an employees salary come before other creditors?
My husband works freelance for a company that is having financial problems, he hasn’t been paid since October. Now they are shuting the doors and we don’t know if they are filing for bankruptcy (or protection). But where does an employee come in on the food chain? Will a company that has leased equiptment to this business be paid before my husband? Please any answers will be very much appreciated. Thank you.
Best answer:
Answer by bare_maximum
NOrmally the employess do get paid, but in many cases not the full amount. They work out some ratio for payments to everyone. The secured creditors get their amt from the assets they have secured, unsecured crs come next and the shareholders are the last to get the amount if any is left.
Normally some formula is worked out and some proportion is fixed for each set of persons to whom the company owes.
Give your answer to this question below!