Arrow Trucking Company’s Employees Finally Get Paid After Chapter 7 Bankruptcy

Posted by Mitchell Wickham | Posted in Credit Repair | Posted on 16-12-2010

There were 564 employees of Arrow Trucking Co. that had not seen a paycheck since they filed claims for repayment when the company dramatically closed its doors, abandoned its employees and filed for Chapter 7 bankruptcy last year.

Those employees will have a slightly cheerier holiday season now that a judge has approved the distribution of almost $2 million from the Arrow Trucking Company collection of assets.

The 564 employees had filed wage and employment law violation claims against Arrow, according to the Tulsa World.

The bankruptcy trustee in the case, Patrick Malloy, spearheaded the order that would start the distribution of the funds. The U.S. Bankruptcy Court in Oklahoma approved the proposal.

“We are signing the checks,” said Malloy, “and we will mail out a bunch today. They should all be out of here Friday.”

It was almost a year ago that Arrow closed its doors, and the bankruptcy proceedings began. On that day last year, the company ceased its operations, and literally locked its employees out of the corporate offices and left their truckers who were out on the road and across the country without the means to return home or offload their freight.

The company was more than 60 years old when it filed for Chapter 7 bankruptcy Oklahoma. The company had in the region of $8.5 million in assets and almost $100 million in liabilities.

Malloy told the Tulsa World that the employees had to wait all this time for a measure of justice.

Their claim against Arrow included the charge that the trucking company violated the WARN Act, a federal compliance requirement that calls for companies to give advance notice of plant closings and mass layoffs. The act calls for 60 days notice for such occurrences. In general, the act requires the notice from companies that have more than 100 companies.

The law says that if this advanced notice is not provided, the company is liable for 60 days of wages provided to every employee.

The almost $2 million provided in this round of payments to former Arrow employees is around 60 percent of the $3.3 million in total wages that will be paid out. The rest of the amount is being withheld by the bankruptcy trustee in case there are future claims.

Malloy said that there will be additional disbursements to employees. “This won’t be the only one,” he said. “We still have claims we’re pursuing that I feel very good about.”

Over 60 of the employees who qualified for the distribution got the entire amount that can be awarded, almost $11,000. They have received about $6,400 in the latest distribution of bankruptcy settlement funds.

The lowest amount that an employee was awarded as a result of the WARN act violations was just under $300.

More than 20 people and two accounting firms worked through Arrow’s records to find assets that they could liquidate in order to pay the awards.

“I’m very pleased that in less than one year we have been able to recover enough money to make a distribution in the same month that Arrow ceased operations,” said Malloy.

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