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Former Employees Of
Pace Airlines To Receive A Portion Of Their Back Wages By Mike Mitchell |
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February 3, 2012 - In September 2009, Pace Airlines
filed for Chapter 7 under the U.S. Bankruptcy Code, the
process of liquidation. At that time, a number of
employees had worked for the company up to six weeks
without getting paid and a total of 423 employees were
not paid for the time they worked.
A
number of employees reported that continued to work for
the company even through they were not getting paid out
of fear the company would not approve their unemployment
benefits if they quit. In September 2009, Pace Airlines CEO, William C. Rodgers was arrested at Piedmont Triad International Airport on charges of knowingly canceling health insurance on employees. |
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North
Carolina Department of Insurance investigators said Rodgers
knowingly canceled his employee group health insurance
without providing the required 45 day notice to his
employees. Rodgers was charged with one count of willful
failure to pay group health insurance premiums.
The Department of Labor began an
investigation on wage and employee complaints and in August
2010, the North Carolina Department of Labor filed a claim on
behalf of the employees for $1.5 million in back wages. In August 2009, the owner of the company
took out a liability policy for himself and its officers for $5
million. When the company filed for bankruptcy they were
entitled to this money. However, because this was in bankruptcy
court the court had the final say over the money. This week, through mediation, the National Union Fire Insurance Co. of Pittsburgh, bankruptcy trustee, Edwin Allman and the former owner of Pace Airlines, William Rodgers agreed to pay $1 million out of the $5 million liability policy in a settlement to the employees back pay, although the liability policy excludes coverage for claims as the result of unpaid wages. The agreement requires National Union Fire Insurance Co. to cut a check for $1 million by April 1 or within 30 days of approval by the bankruptcy court. |