Checks should start being issued this week to employees who are owed money after being abruptly laid off at Henrico County-based Colortree Group last June.

A total of about $315,800 will be distributed to the 240 former employees, according to Jeremy Williams, a lawyer with Kutak Rock who represents the court-appointed Chapter 7 trustee Peter J. Barrett. Williams said he and Barrett were advised last week of the distribution by lawyers handling the class action lawsuit for the employees.

A deal was approved last month by a federal bankruptcy court judge to put $500,000 into a pot of money to pay the former employees who were let go from the printing company without the required federal 60-day termination notice. The $500,000 pot of money won’t all go entirely to the employees. After fees and expenses, $315,800 will be divided among the workers.

About $14,918 in expenses will come from the $500,000 pool of funds. American Legal Claim Services, the disbursing agent, will get paid $8,850.

After those expenses are paid, a third of the remaining money — $157,910 — will go toward lawyers representing the workers in the case for their fees.

What’s left is the $315,800 for workers.

Exactly how much each worker might get isn’t known. But federal and state withholding taxes will be deducted from the base amount each employee receives.

Barrett, the court-appointed trustee, devised a deal to pay the employees now before the Chapter 7 bankruptcy case is finalized. The employees are creditors in the company’s bankruptcy case.

The agreement settles a class action lawsuit filed in U.S. District Court in Richmond alleging that Colortree violated the federal Worker Adjustment and Retraining Notification Act, or WARN Act. That law requires companies with a large number of employees who are being laid off as part of a mass layoff or plant closing to provide 60 days notice or to pay them their wages and benefits for the 60 days.

Barrett has said the settlement deal is reasonable and in the best interest of the company, its creditors and former employees.

After operating for more than 30 years printing direct-mail envelopes, flyers and brochures, Colortree abruptly closed its offices and plant at 8000 Villa Park Drive, off East Parham Road.

The company was forced into Chapter 7 bankruptcy liquidation in September. Its equipment and other assets were sold at auction in September.

Sign up to receive daily business news emails from The Times-Dispatch

* I understand and agree that registration on or use of this site constitutes agreement to its user agreement and privacy policy.
Load comments

You must be a full digital subscriber to read this article You must be a digital subscriber to view this article.