Judge considering proposed pay offer
Thursday, June 1st 2000, 12:00 am
By: News On 6
TULSA, Okla. (AP) -- A federal bankruptcy judge has taken under advisement a proposal by attorneys for Commercial Financial
Services Inc., its creditors and bondholders to give a week's worth of pay to 1,367 workers laid off between Jan. 8, 1999, and Feb. 8,
Attorneys made the offer Wednesday in U.S. bankruptcy court. In exchange for the pay, less taxes, the former workers would sign a
release promising not to sue over their layoffs from the now-defunct debt collection company.
"This settlement will make a lot of claims go away," said CFS attorney Larry Wolfson. "We won't know how many until we give them
Attorneys representing a group of workers in a class-action lawsuit against CFS argued against the proposal. Attorney Michael
McCune described the offer as an attempt by CFS to circumvent the class-action lawsuit.
Attorney Jed Penny said the offer might be the equivalent of having workers "halfway opting out" of the lawsuit. He said there was no need for workers to take the settlement and drop out of the lawsuit.
"Is the acceptance of a settlement offer opting out?" he said. "I think that (a) settlement is opting out."
The proposal is similar to one the bankruptcy court approved last summer. CFS spent more than $2.2 million to stave off lawsuits from employees let go when the company ceased operations.
About 98 percent of former employees took the earlier offer that amounted to two weeks pay for the 1,400 people let go when the
company finally shut down.
The class-action lawsuit pending contends the company violated federal law on the amount of warning that must be given before a
significant layoff of personnel.
CFS filed for bankruptcy on Dec. 11, 1998, as a step in trying to keep the Tulsa-based business open. It ceased operations in June, 1999.
The company had more than 3,900 employees in Tulsa and Oklahoma City.
In Wednesday's hearing, CFS attorney Caroline Benediktson said the former CFS workers were smart enough to decide whether to take the week's pay settlement offer or remain in the class-action lawsuit and take a chance on a payday that could be much greater or zero.
Bankruptcy Judge Dana Rasure said she would rule on the planned offer.