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Bankruptcy Lawyer Tooele Utah

Bankruptcy Lawyer Tooele Utah

A troubled business may be burdened with a collective-bargaining agreement. Such an agreement may substantially affect the value of the enterprise. Under the Bankruptcy Code, a Chapter 11 debtor may seek court approval to reject a collective bargaining agreement. If you need a consumer bankruptcy such as a chapter 7, chapter 13 or even a chapter 12, please call Ascent Law for your free consultation.

A union is allowed to file a general unsecured bankruptcy claim for its members’ lost wages stemming from rejection of the collective bargaining agreement. Lost wages are recoverable as damages stemming from rejection of an executory contract and are not limited to the one-year period following the petition date. The union is allowed to deduct compulsory dues from the damages payable to individual employee claimants. An experienced Tooele Utah bankruptcy lawyer can help employees when their employer has filed for bankruptcy.

If the estate assets include a subsidiary that is a party to a collective bargaining agreement, the liquidator may be forced to file a Chapter 11 bankruptcy petition for the subsidiary in order to modify the agreement, thereby facilitating the sale. However, the union’s claim may substantially affect the parent companies residual equity value in the subsidiary.

Defined Benefit Plans

Large firms going through liquidations frequently must deal with defined benefit pension plans that, when times were better, were set up to provide predetermined and calculable retirement benefits to employees. As the debtor proceeds toward liquidation, it must continue to manage its pension plan, but with a new objective—to dispose of the plan through termination or sale. Typically, a debtor that establishes a defined benefit plan also serves as the plan’s sponsor. Members of its management team often serve as the committee that decides ongoing plan matters, such as investing and benefit changes. In addition, the plan administrator, who serves the primary fiduciary role for the plan and manages its day-to-day activities, also is typically a member of the sponsor’s management team. Within this incestuous set-up, huge problems arise when a firm must be liquidated. Defined benefit pension plans maintain investment assets separate from an employer’s assets in order to fund the benefit payments to current and future retirees. Accordingly, an employer has several responsibilities as a fiduciary. In particular, an employer must ensure that its actions and those of the pension plan comply with various federal laws that govern retirement plans, especially the Employee Retirement Income and Security Act of 1974 (ERISA). Responsibility for administering a plan is likely to be thrust upon the liquidator after a company files bankruptcy. In dealing with a liquidating company’s defined benefit pension plan, the plan administrator needs to achieve each of the following objectives:

• Manage and dispose of the plan in a way that minimizes the cost or maximizes the recovery to the debtor.

• Reach closure in a timely fashion while avoiding any subsequent exposure for the debtor and its manager.

• Ensure that the interests of the plan’s participants are addressed appropriately.

Although these objectives are not mutually exclusive, conflicts sometimes arise among them. For example, looking after the interests of the participants by enhancing their benefits could reduce a plan’s monetary surplus or increase its deficit to the detriment of the debtor. Accordingly, a plan administrator must take care to ensure that the interests of both the participants and the debtor are addressed properly.

Interim Management
The administrator of a debtor’s pension plan is responsible for managing the plan as long as the debtor remains the plan sponsor. This typically involves determining eligibility for benefits; paying benefits to current retirees; advising participants or beneficiaries of their rights under the plan; directing investment policies; paying plan expenses; preparing necessary reports for participants; and maintaining plan compliance with ERISA, the Internal Revenue Code, and other relevant laws.

Defined Contribution Plans

Defined-contribution pension plans are typically much easier for a liquidator to terminate than defined-benefit plans. First, the plan document is reviewed to see if it needs to be amended to comply with current law or to correct any obvious disqualifying defects. If necessary, amendments or corrective action should be taken. The bankruptcy trustee then files a motion for authority to (i) amend, if necessary, and terminate the plan; (ii) fully vest all plan participants in any unvested account balances; (iii) take any necessary action to maintain tax qualification of the plan upon termination; and (iv) distribute the assets. If the termination occurs outside of bankruptcy, the governing body (i.e., board of directors, managers, receiver, etc.) passes a resolution authorizing the same. The liquidator should (but is not required to) submit the plan to the IRS for a determination that the plan is qualified upon termination.
Employees who have left the company are entitled to immediate distribution prior to plan termination and prior to receipt of any determination letter from the IRS. They are provided with a distribution notice and may elect a direct rollover, taxable distribution, or deferral of distribution. Until the plan is terminated (and IRS letter received in most cases), the liquidator cannot require them to take a distribution, but they may elect to take a distribution. The liquidator should attempt to distribute as many voluntary distributions as possible prior to termination.

Any employees who remain employed through the liquidation and any former employees who do not elect to take a distribution prior to termination must wait until the plan is terminated before they receive a distribution. If a participant does not return a distribution form, the plan administrator is required to set up an individual retirement account (IRA) for the participant and roll the benefits into the IRA. Other than the distribution tax notice, no notice to participants or anyone else is required.
Sometime down the road, the IRS will issue a determination letter on the plan. The liquidator may, but is not required, to wait for the determination letter before distributing the assets. The reasonable administrative expenses of plan termination and winding up can be charged to the plan accounts before distribution, if necessary. The preferred method is to obtain the creditors’ approval to allow the company to pay the expenses.

Problems occur when the plan trustee or plan administrator has abandoned the plan. The custodian of the assets usually will not release the funds without direction from the plan trustee. In that situation, typically the bankruptcy trustee assumes the responsibilities of trustee of the plan. Once all assets are distributed to participants or rolled into IRAs, the plan trustee can resign, assuming he or she hasn’t already disappeared from the scene.

When the debtor has not made the requisite contributions, the PBGC normally asserts a claim to recover these amounts. This claim has priority status. Members of the board of directors and other key executives may have personal liability.

401(K) Plans

In the course of business operations, a company frequently establishes and maintains a 401(k) plan, a retirement plan qualified under Section 401(a) of ERISA, for the benefit of its employees. The debtors’ employees who satisfied certain age and service requirements are given the opportunity to participate in the plan. As a result, at the time of bankruptcy, current and former employees of the debtor are entitled to their plan account balances.

In a liquidation, the 401(k) plan is typically no longer a necessary or meaningful component of the debtors’ operations or bankruptcy estate. As long as the plan remains in effect, the debtor will continue to incur expenses for ongoing administration and will incur legal expenses as the plan is amended to comply with changes in the law. Under ERISA, these expenses can only be paid by the debtor or from the assets of the Plan. These expenses become completely unnecessary and of no benefit to anyone, since the participants are able to continue to receive the tax benefits provided under the 401(k) plan by transferring their assets to an IRA or to a plan maintained by a new employer. Accordingly, as part of the ongoing resolution of the debtors’ affairs, the liquidator should file a motion with the court for authority to terminate the 401(k) plan and make appropriate distributions to the participants.

After the plan’s termination, each remaining participant receives a distribution equal to the amount held in his or her account after the payment of allocable costs and expenses incurred by the termination. Individual participants may elect either to have their amounts taxed currently or defer taxation by transferring the amount distributed to an IRA or a plan maintained by a new employer. The sooner the liquidator takes the necessary action to terminate the 401(K) plan, the better.

Deferred Compensation Plans

A deferred compensation plan (deferred comp plan) typically allows a highly paid executive to defer a portion of his or her annual compensation until retirement. In order to avoid income tax on this compensation in the current year, the obligation must be an unsecured contractual obligation of the employer/ company. These are not Keogh, 401(k), or other qualified plans. Upon bankruptcy, these executives become unsecured creditors of the estate with respect to their deferred compensation claims, and any plan assets become property of the estate. These plans are often called “rabbi trusts,” because the first such plan was created as part of financial planning for a rabbi.

Post-retirement Health Benefits

A Chapter 11 trustee or debtor-in-possession must pay retiree benefits as an administrative expense of the bankruptcy estate. Retiree benefits are limited to health care, accident, disability, and death benefits, and do not apply to give priority to claims by trust funds that administer only pension benefits for retired workers. Likewise, premium payments for retiree health benefits are entitled to priority status as an administrative expense. Premiums are due annually, and the employer is required to pay a full year of premiums, even though it has plans to cease doing business shortly after the premium due date.

A bankruptcy procedure, separate but similar to the rejection of collective bargaining agreements, is used in evaluating whether the requirements for termination or modification of retiree health benefits have been met. Unless the benefit plan is modified, the employer must continue retiree benefits. These procedures require that prior to seeking modification of retiree benefits, the employer must bargain with a representative of the retirees, either the union or a separate retiree committee. If bargaining is not successful, the employer can then seek modification of retiree benefits.

Workers’ Compensation Insurance

Utah law require that a company either have workers’ compensation for its employees or have a bond on file with the state to satisfy any obligations that may arise under the policies. Premiums are typically based on the experience rating of a company’s workforce. The lower the incident of injury, the lower the workers’ compensation rates. Operating without workers’ compensation insurance is illegal.

Employee issues frequently arise in large liquidations. In some cases, the liquidator needs to retain existing employees in order to maintain its subsidiaries’ viability long enough to sell the operating businesses for the best prices. In other cases, the need may be to downsize by laying off employees and closing plants. Special incentives may be needed to entice key employees to stay. Incentives should not, however, be so large that they create problems with other employees who are asked to stay and make financial sacrifices. Particular care is required in implementing plant closings and mass layoffs. The WARN Act may impose substantial penalties on a firm that terminates large numbers of employees without adequate notice. The liquidator should proceed with due care and caution.

Terminating pension and other employee benefit plans is complex. If the plan is solvent, the surplus (after paying required taxes) represents a potential recovery for the estate and its creditors. If the plan is insolvent, the deficit represents another source of claims. In either case, the sale or termination of the debtor’s various qualified and nonqualified benefit plans requires a number of carefully executed steps to satisfy the requirements of the IRS, PBGC, and other interested parties and to maximize residual values for the estate.

If you are an employee in Tooele and your employer, a large corporation has filed for bankruptcy, consult an experienced Tooele Utah bankruptcy lawyer.

Tooele Utah Bankruptcy Attorney Free Consultation

If you have a bankruptcy question, or need to file a bankruptcy case, call Ascent Law now at (801) 676-5506 for your Free Consultation. We want to help you.

Michael R. Anderson, JD

Ascent Law LLC
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States

Telephone: (801) 676-5506

Ascent Law LLC

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Tooele, Utah


From Wikipedia, the free encyclopedia
Tooele, Utah
Tooele City Hall

Tooele City Hall

The Greatest City in Utah[1]
Location in Tooele County and the state of Utah

Location in Tooele County and the state of Utah
Location of Utah in the United States

Location of Utah in the United States
Coordinates: 40°32′11″N 112°17′52″WCoordinates40°32′11″N 112°17′52″W
Country United States
State Utah
County Tooele
Settled 1851

 • Type Mayor/City Council
 • Mayor Debbie Winn[2]

 • Total 24.16 sq mi (62.57 km2)
 • Land 24.14 sq mi (62.52 km2)
 • Water 0.02 sq mi (0.04 km2)

5,050 ft (1,537 m)

 • Total 35,742
 • Density 1,480.61/sq mi (571.69/km2)
Time zone UTC−7 (Mountain (MST))
 • Summer (DST) UTC−6 (MDT)
ZIP code
Area code 435
FIPS code 49-76680[4]
GNIS feature ID 1433590[5]
Website [4] http://tooelecity.org/

Tooele (/tˈwɪlə/ too-WIL-ə) is a city in Tooele County in the U.S. state of Utah. The population was 35,742 at the 2020 census.[6] It is the county seat of Tooele County.[7] Located approximately 30 minutes southwest of Salt Lake City, Tooele is known for Tooele Army Depot, for its views of the nearby Oquirrh Mountains and the Great Salt Lake.

Tooele, Utah

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Reviews for Ascent Law LLC Tooele, Utah

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John Logan

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We've gotten divorce and child custody work from Ascent Law since the beginning because of my ex. We love this divorce firm! Staff is gentle, friendly and skilled. Tanya knows her stuff. Nicole is good and Ryan is fun. Really, all the staff here are careful, kind and flexible. They always answer all my questions, explain what they're doing and provide great legal services. I personally think they are the best for divorce in Utah.

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Jacqueline Hunting

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I have had an excellent experience with Ascent Law, Michael Reed is an absolutely incredible attorney. He is 100% honest and straight forward through the entire legal process of things, he also has a wonderful approach to helping better understand certain agreements, rights, and legal standing of matters, to where it was easy to know whats going on the entire process. I appreciate the competency, genuine effort put forth, and assistance I received from Ascent and attorney Michael Reed, and I will be calling these guys if ever I have the need again for their legal assistance! 5star review Wonderful attorneys!

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Anthony Ziegler

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This review is well deserved for Ryan and Josh. New clients should know they are worth the 5 star rating we give them. We needed 2 sessions from them because of the complexity of the matter, but they are both very passionate about his helping others in need.  My sister needed bankruptcy and I needed divorce.  Sometimes they go hand in hand but a large shout out to this team - also Nicole is one of the sweetest people you ever did meet - she offered me warm cookies!

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Thomas Parkin

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Mike Anderson and his colleagues & staff are knowledgeable, attentive and caring. In a difficult and complex case that eventually went to trial, Mike was the voice of reason and the confidence I needed. His courtroom abilities are amazing and I felt his defense of me was incredible. His quick thinking and expertise allowed for a positive result when I felt the World was crumbling. His compassion, after the case, has helped me return to a good life. I trust Mike and his staff. They are friendly and very good at what they do.

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Yeran Merry

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I worked with Attorney Alex and Paralegal Ami in my divorce case. I got to know the team very well over the course of two years. I cannot think of a better team to have worked with. Ami and Alex are not only exceptional law professions who are very knowledgeable and thorough, they are also the best human beings who empathize with the emotions I was experiencing. Alex was conscious of my budget and worked efficiently to try to reduce unnecessary legal expenses. My case also involved some dealings with a foreign country that Alex and his team had previously dealt with.  They did an amazing job addressing cultural barriers in a very respectful manner and did not fall short in quality of work or in standards when dealing with some of these new challenges. Ami deserves a medal for being extremely professional, calming, and compassionate when it is needed most.  When you need family law attorneys, call this firm. I now feel I can move forward with grace and dignity.

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About the Author

People who want a lot of Bull go to a Butcher. People who want results navigating a complex legal field go to a Lawyer that they can trust. That’s where I come in. I am Michael Anderson, an Attorney in the Salt Lake area focusing on the needs of the Average Joe wanting a better life for him and his family. I’m the Lawyer you can trust. I grew up in Utah and love it here. I am a Father to three, a Husband to one, and an Entrepreneur. I understand the feelings of joy each of those roles bring, and I understand the feeling of disappointment, fear, and regret when things go wrong. I attended the University of Utah where I received a B.A. degree in 2010 and a J.D. in 2014. I have focused my practice in Wills, Trusts, Real Estate, and Business Law. I love the thrill of helping clients secure their future, leaving a real legacy to their children. Unfortunately when problems arise with families. I also practice Family Law, with a focus on keeping relationships between the soon to be Ex’s civil for the benefit of their children and allowing both to walk away quickly with their heads held high. Before you worry too much about losing everything that you have worked for, before you permit yourself to be bullied by your soon to be ex, before you shed one more tear in silence, call me. I’m the Lawyer you can trust.