Clio Holdings Goes Chapter 7
WILMINGTON, Del. – Stone-fabricator consolidator Clio Holdings LLC filed for bankruptcy here on Jan. 15, and immediately faced a class-action challenge from former employees.
Clio reported liabilities of between $10 million – $50 million and assets of $50,000-$100,000 in a Chapter 7 petition recorded with the U.S. Bankruptcy Court in Delaware. The company also filed a 332-page creditor list.
Unlike a Chapter 11 reorganization of a company, Chapter 7 signals a final cessation of business and liquidation of assets.
Clio, which operated stone-fabrication services under the Premier Surfaces and US Marble trade names, closed all operations Jan. 3, leaving former employees with no final paycheck and no ability for extended COBRA health insurance.
Two former employees cited the quick closing as part of an adversary complaint filed Jan. 16 with the Delaware court.
Zachary Bentley, an employee at Clio’s Remus, Mich., plant, and Troy Ladehoff, a worker at the Riverside, Mo., facility, accused Clio of closing its doors without following the Worker Adjustment and Retraining Notification (WARN) Act, a federal law concerning mass layoffs.
Read the documents:
Clio Holdings LLC bankruptcy petition
Creditor list
Bentley-Ladehoff class-action complaint
Creditor-meeting notice
The two ex-employees maintain they didn’t receive 60 days prior warning before the closing, as required by the WARN Act, nor did they receive compensation, health-insurance coverage and other employee benefits for 60 days after their termination.
The class-action filing stated that it covered “approximately 1100 persons” believed to be employed by Clio at its closing. The complaint asks the bankruptcy court for a priority claim and judgement for WARN Act-related compensation and benefits.
Whether there’s anything available to pay any claims again Clio Holdings may be doubtful. A court notice to creditors imposes a stay against most collection activities also stated that, “No property appears to be available to pay creditors.”
The only notice of payment in the filing came from Clio’s Delaware-based bankruptcy attorney, who received $75,000 before Jan. 15 for work on the case.
A meeting of creditors is schedule for Feb. 5 at 11 a.m. EST in room 3209 of the J. Caleb Boggs Federal Building in Wilmington. The case number is 20-10080-BLS.
