Bankruptcy is important for some businesses, because it helps them restructure their businesses and to emerge with a solution that works for them financially. Sometimes, workers with these companies fight the bankruptcy or make their own claims through unions, because they are due vacation and severance pay. If you find yourself in this situation with your business, your attorney may be able to help you negotiate the difficulties of paying out compensation to those who have had to be terminated from their jobs, so you can emerge from bankruptcy without debts.
In this case, which was reported on October 15, news about a settlement involving Sparrows Point Steel Mill has stated that an agreement has been made. The agreement has been over a year in the making. Now, it's expected that each of over 4,000 union workers who lost their jobs when the firm closed will receive around $1,500 before tax. An attorney working with the case said this was one of the only chances the union had to get payment to its members, so it was a satisfactory agreement.
Sparrows Point was just one facility owned by RG Steel, which also has plants in Ohio and West Virginia. Due to the increasing costs of materials to create steel, the company could no longer afford to keep its doors open. Steel prices were on the decline, and no reasonable solution seemed viable other than Chapter 11 bankruptcy.
RG Steel sold its facilities in May 2012 for around $125 million, but that will only satisfy a portion of over $1 billion that was owed when bankruptcy was filed.
Source: The Baltimore Sun, "Court approves Sparrows Point settlement, dismisses bankruptcy," Natalie Sherman, Oct. 15, 2015