Directors And Officers May Be Liable For WARN Act Claims
Law360, New York (October 21, 2015, 11:24 AM EDT) -- This article explores the significant impact a recent decision by the U.S. Bankruptcy Court for the District of Delaware will have in altering the already complex landscape of bankruptcy proceedings involving liability for the failure to issue proper notice under the Worker Adjustment Retraining Notification Act (WARN Act) and its state law equivalents. In Stanziale v. MILK072011 LLC, Case No. 13-10044 (KG), Adv. Pro. No. 14-50953 (KG) (Bankr. D. Del. Sept. 21, 2015), in the context of denying a motion to dismiss a complaint, the Bankruptcy Court became the first court to hold that the controlling owner, manager and president — each of whom owe a fiduciary duty to the Delaware limited liability company they serve — may have breached their fiduciary duties by not giving the requisite notice....
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