Dear all,

This is an update on the Hull House bankruptcy case.

As I predicted at our December 2^nd meeting,  on December 4^th  the Bankruptcy Court approved the Settlement Agreement reached between the Trustee’s counsel, the officers and directors of Hull House, and Quattro FPO Solutions LLC, which was the accounting firm for Hull House.  This Settlement Agreement resulted in a payment of $850,000 into the bankrupt estate by the Board and the accounting firm.   The Board and the accounting firm also abandoned their respective claims as creditors, totaling approximately $520,000.   

Attorney fees for the Trustee’s counsel will first be paid from the settlement amount, before the net amount is made available for the payment of other claims.  The attorney’s fee is $170,000 (20% of the total), which leaves $680,000 from the Settlement amount.  The Trustee is taking the position that none of the secured creditors have a security interest in this $680,000 amount.  If that position is approved by the Court, the $680,000 will be available to pay the claims of priority unsecured creditors.  

On December 13, the Trustee filed its “Objections” to the claims filed by most of the creditors, including the Union.   These “objections” basically set forth the Trustee’s position as to which claims are entitled to priority, which are non-priority, which are allowed and which are disallowed. 

The good news is, as I reported on December 2, the Trustee is proposing to allow the severance pay and unpaid vacation pay claims as priority unsecured claims.  These amounts are $368,471.66 for severance, and $163,490.92 in unpaid vacation, for a grand total of $ 531,962.58 in PRIORITY UNSECURED CLAIMS.

The Trustee is allowing as non-priority (general) unsecured claims the one-month payments in lieu of getting proper notice of layoffs, in the amount of $ 412,130.81, and unreimbursed expenses in the amount of

$26,677.92.  These are non-priority GENERAL unsecured claims.

The Trustee did not agree that WARN ACT payments would be allowed, nor did they agree to allow the unpaid 401(k) payments. If these had been allowed, they would have been in the nature of non-priority GENERAL unsecured claims.

And there were six union members who field individual claims.  The claims filed by the Union on their behalf are being disallowed, and will be dealt with separately.  I don’t know what the six members claimed, but if it included severance and unpaid vacation, those amounts will be entitled to priority status, and may also get a piece of the Settlement.  The Trustee will not let them be paid twice, however, and so they are being carved out of the Union’s multiple claim and treated individually.

So, the GOOD NEWS is that if the Court ultimately rules in favor of the Trustee on these issues, and after payment of administrative costs and fees, there should be some money available to pay a decent chunk of the SEVERANCE and UNPAID VACATION claims.  There are other priority unsecured creditors who could also get something.  There won’t be enough money available to be non-priority claims, however. 

There is a court hearing on the Trustee’s Objections at 10:00 a.m. on January 15 in Courtroom 742, Dirksen Federal Building, 219 S. Dearborn, Chicago.  Our attorney and I will be there.  At this point, we don’t know what the Court will do. We will support the Trustee’s position that the settlement amount should not be considered as collateral for the secured creditors. and we don’t know if the hearings will be concluded on that day, or run on into other days.  I will report back to you after the 15^th.

So, in a nutshell, there is a possibility that you will get some of your unpaid vacation and severance.   Stay tuned!

In solidarity,

Robert T. (Tim) Yeager

Regional Organizer

NOLSW/UAW Local 2320

542 S. Dearborn Street, Suite 490

Chicago, IL 60605-3503

312-461-0543, ext. 101

866-270-6659 toll free

312-218-1228 mobile

312-957-8091  FAX

www.nolsw.org