Circuit City PTO Claims Get Priority Status: Court

Law360, New York (October 7, 2009, 2:49 PM EDT) -- A federal judge has overruled Circuit City Stores Inc.’s attempts to discard former employees' requests for payment of accrued time off and designated the workers’ wages a priority claim in the consumer electronics retailer's liquidation.

Judge Kevin R. Huennekens of the U.S. Bankruptcy Court for the Eastern District of Virginia determined Tuesday that the former employees are entitled to priority claims for payment of unused paid time off, deeming Circuit City’s change to the payment policy days before entering bankruptcy ambiguous.

On Nov. 7, 2008, just...
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