Ex-GBS workers get no final paychecks

August 22, 1992|By Kim Clark | Kim Clark,Staff Writer

It's every worker's nightmare. It also could prove a major embarrassment to companies who specialize in telling others how to handle their finances.

On Thursday, 35 workers of GBS Corp., a financial adviser operating under Chapter 11 bankruptcy, were told that their employer -- and their jobs -- no longer existed.

And when they returned to pick up their last paychecks yesterday, there weren't any of those, either, according to the financial consulting company that bought most of GBS's assets this week.

"We are being jerked around," an ex-employee said yesterday. None of the former employees contacted yesterday agreed to be identified, because many are trying to be hired by the new company, Leadley, Gunning & Culp International.

The attorneys for bankrupt GBS said yesterday that they don't owe the workers any money because Leadley also bought the responsibility of paying workers.

David Rice, bankruptcy attorney for GBS, a Columbia-based franchise company, said he had negotiated a settlement with the buyer to assume "all obligations incurred in the ordinary course of business" beginning April 1, 1992.

The money left in GBS' bank accounts doesn't cover what is already owed to dozens of other creditors, he said.

But Leadley, Gunning & Culp International, which paid $1.8 million for most of the assets of GBS Thursday, says it bought only assets -- not the workers.

"The employees of GBS have no call on us," said Robert Leadley, chairman of the St. Catharines, Ontario-based financial-services franchiser.

Whichever company is responsible for the workers' pay is probably breaking the law, a state official said. Maryland wage laws require companies to pay their laid-off employees the wages, vacation and severance they are owed on the next regular payday after their termination, said Nancy Burkheimer, assistant secretary of the Maryland Department of Licensing and Regulation. The workers said Friday was their regular payday.

Ms. Burkheimer said the law allows the workers to collect double damages if they can prove their claims in court. She said the state used to investigate such claims but eliminated the staff in a cost-saving move.

Now, she said, it is up to the workers to get an attorney and pursue the claim in bankruptcy court, which oversees GBS' operations as it finishes a reorganization plan.

Former GBS workers contacted yesterday said they were seeking an attorney. But in the meantime, the dispute could cost many of them a great deal.

Many workers lived from paycheck to paycheck, an ex-employee said. Another former employee estimated that the workers were owed a total of more than $40,000 in wages for the last two weeks' work and probably an equal amount in vacation and severance pay.

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