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Jurisdiction - Bankruptcy - WARN Act.

Byline: Mass. Lawyers Weekly Staff

Where plaintiffs have alleged that the defendant purchasers of a debtor's assets violated the Worker Adjustment and Retraining Notification Act claim by announcing that they were ceasing production at a Revere facility and then terminating workers without providing the statutorily required notice, the suit should be referred to the U.S. Bankruptcy Court for the District of Massachusetts, as the suit concerns parties already involved in the bankruptcy case, is closely linked to orders issued by the bankruptcy court, and may affect the administration of the estate.

"On April 3, 2018, certain creditors of New England Confectionery Company ('NECCO') filed an involuntary bankruptcy petition. ... Round Hill Investments LLC ('Round Hill') then purchased substantially all of NECCO's assets from the bankruptcy estate on May 31, 2018, including a facility in Revere, Massachusetts ('Revere Facility'), and formed Sweethearts Candy Co. (now SCS Services LLC, 'Sweethearts') to manage the purchased NECCO assets. ... Pursuant to a transition services agreement entered into between Round Hill and NECCO, NECCO agreed to continue to employ its workers at the Revere Facility through November 30, 2018 and to handle personnel matters as it had in the past. ... Plaintiffs claim that on July 24, 2018, Defendants announced that they were ceasing production at the Revere Facility and then terminated the workers without providing the required advanced notice.

" First, the indemnification clause at issue is actually part of the Bankruptcy Court's Sale Order; second, the facts and circumstances surrounding the shut-down are already the subject of a proceeding before the Bankruptcy Court; and third, Plaintiffs were purportedly employed by debtor NECCO at the time of the alleged WARN Act violation. As such, this case appears to have a sufficiently close nexus to the bankruptcy proceeding to establish 'related to' jurisdiction.

"Accordingly, the case is referred to the United States Bankruptcy Court for the District of Massachusetts as related to In re New England Confectionary Company, Inc., No. 18-bk-11217 (Bankr. D. Mass.). The Court refers the case primarily because it concerns parties already involved in the bankruptcy case, is closely linked to orders issued by the Bankruptcy Court, and may affect the administration of the estate."

Main, et al. v. SCS Services LLC, et al. (Lawyers Weekly No. 02-564-18) (6 pages) (Burroughs, J.) (Civil Action No. 18-cv-11586-ADB) (Nov. 15, 2018).

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Title Annotation:Worker Adjustment and Retraining Notification Act, Main v. SCS Services LLC, U.S. District Court for the District of Massachusetts
Publication:Massachusetts Lawyers Weekly
Date:Nov 20, 2018
Words:401
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