State Opposes Employer Trying to Force Injured Workers to Settle Their Claims in Bankruptcy Court.Business Editors
SAN FRANCISCO--(BUSINESS WIRE)--Aug. 14, 2002
The California Department of Industrial Relations industrial relations
Relations between the management of an industrial enterprise and its employees.
the relations between management and workers (DIR) and its Office of Self Insurance Plans (SIP) is opposing the bankrupt BANKRUPT. A person who has done, or suffered some act to be done, which is by law declared an act of bankruptcy; in such case he may be declared a bankrupt.
2. It is proper to notice that there is much difference between a bankrupt and an insolvent. Henry Mayo Hospital's attempt to force injured in·jure
tr.v. in·jured, in·jur·ing, in·jures
1. To cause physical harm to; hurt.
2. To cause damage to; impair.
3. workers to resolve unpaid workers' compensation workers' compensation, payment by employers for some part of the cost of injuries, or in some cases of occupational diseases, received by employees in the course of their work. claims in U.S. bankruptcy court bankruptcy court n. the specialized Federal court in which bankruptcy matters under the Federal Bankruptcy Act are conducted. There are several bankruptcy courts in each state, and each one's territory covers several counties. rather than before the state's Workers' Compensation Appeals Board (WCAB WCAB Workers' Compensation Appeals Board ).
Henry Mayo Newhall Memorial Hospital (Henry Mayo), Valencia, in Chapter 11 bankruptcy proceedings bankruptcy proceedings n. the bankruptcy procedure is: a) filing a petition (voluntary or involuntary) to declare a debtor person or business bankrupt, or, under Chapter 11 or 13, to allow reorganization or refinancing under a plan to meet the debts of the party since November 2001, stopped paying workers' compensation benefits to its injured employees in May. The hospital has filed an emergency motion that would remove jurisdiction of those workers' appeals from the WCAB to the U.S. bankruptcy court. The motion also seeks sanctions Sanctions is the plural of sanction. Depending on context, a sanction can be either a punishment or a permission. The word is a contronym.
Sanctions involving countries:
tr.v. jeop·ard·ized, jeop·ard·iz·ing, jeop·ard·izes
To expose to loss or injury; imperil. See Synonyms at endanger. the integrity of California's self insurance program by defeating the purpose of the deposit.
"Self insurance statutes protect injured workers by requiring self insured employers to post a security deposit to pay their workers' compensation liabilities if the employer is unable to pay benefits due for any reason," said SIP Manager Mark Ashcraft. "Henry Mayo stopped payment of their workers' compensation benefits, causing DIR to turn over both the security deposit and the workers' compensation liabilities of the hospital to the Security Fund. The Security Fund was created to ensure continued payment of self insured workers' compensation benefits to the injured workers."
Henry Mayo and its related companies were self insured from 1983 to 1997. The hospital filed for bankruptcy bankruptcy, in law, settlement of the liabilities of a person or organization wholly or partially unable to meet financial obligations. The purposes are to distribute, through a court-appointed receiver, the bankrupt's assets equitably among creditors and, in most in November 2001 but continued paying on its self insured benefits to injured employees through its third-party administrator, RSKCo, until May 17, 2002 without lifting the automatic stay on payment of pre-petition liabilities caused by filing a bankruptcy petition. After learning of the hospital's bankruptcy in March 2002, SIP repeatedly asked whether they intended to lift the automatic stay, to continue paying benefits, or if they intended to default on their self insured workers' compensation obligations.
As is customary when a self insurer files a bankruptcy petition but does not seek court permission to continue paying benefits, SIP conducted a special audit of remaining liabilities and found Henry Mayo had under-reported their potential liabilities in the hospital's annual report to SIP. The employer was ordered by SIP to increase their security deposit more than $1.3 million.
Ceasing to pay claims benefits put Henry Mayo in default, triggering DIR to order the security deposit and all liability for the claims be turned over to the Security Fund, as permitted by the California Labor Code. Disputes involving workers' compensation claims and their settlement fall under the jurisdiction of the WCAB within DIR.
Henry Mayo alleges the workers' compensation security deposit and claims files are property of the estate, subject to the automatic stay, and wants sanctions imposed against DIR and the Security Fund for taking action to insure continued payment of benefits, which also prevents Henry Mayo from forcing the remaining injured workers into bankruptcy court with all the other creditors to settle their claims.
"To my knowledge, this is the first time since the Security Fund was created in 1984, in over 50 self insured insolvencies, that an employer has attempted to change the court of jurisdiction for payment of self insured workers' compensation claims from the WCAB to bankruptcy court or objected to the Security Fund performing its statutory duties," Ashcraft said.