Chicago workers may have to seek wages in bankruptcy court

There are many reasons that a business owner in Illinois may have to seek bankruptcy protection. Slow sales and rising costs, for example, can lead to someone filing for bankruptcy. Some owners, however, engage in illegal activity and wind up owing creditors and even their own employees, as one recent incident illustrates.

In May 2013, the Illinois Labor Department determined that the owner of Little Village Car Wash was paying employees less than the minimum wage. It also stated that these workers were owed back pay. In total, the owner was found to be responsible for $262,000 in pay and fines. Recently, the owner tried to settle the matter by offering $25,000, but the Illinois Attorney General’s Office rejected it.

In 2015, the owner sold the car wash for $1.5 million and it later reopened under new ownership. Recently, eight workers from the car wash were hoping that a Cook County judge would enforce the Labor Department’s findings. However, the owner filed for personal bankruptcy a day earlier.

As a result, the employees will have to go to bankruptcy court in order to try to collect any wages they are owed. According to the Chicago Tribune, they will be behind other creditors trying to collect money from the car wash’s owner. The man allegedly had property interests in several other local businesses.

This case illustrates the importance both of running a business honestly and how a bankruptcy court may prioritize debts someone owes. Anyone with questions regarding the issue should consult with an attorney.

Source: Chicago Tribune, “Car wash workers hosed as wage-cheating owner declares bankruptcy,” Kim Janssen, May 19, 2016

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