Colortree Group offices

Colortree Group Inc.’s plant and offices were at 8000 Villa Park Drive in Henrico County.

Employees abruptly laid off in June from their jobs at Henrico County-based Colortree Group should see some of the money owed to them later this month.

U.S. Bankruptcy Judge Keith L. Phillips approved a deal Thursday to put $500,000 into a pot of money to pay the 240 former employees who were let go from the printing company without the required federal 60-day termination notice.

The hope is that the former employees will receive a check by the end of the month, said Jeremy Williams, a lawyer with Kutak Rock law firm who represents Peter J. Barrett, the court-appointed Chapter 7 trustee.

“It’s everyone’s goal to get that done by the end of the year,” Williams said about the money for employees.

The deal approved Thursday settles a class-action lawsuit filed on behalf of the workers, who became creditors in the bankruptcy case.

Exactly how much each worker might get hasn’t been determined.

The $500,000 pot of money won’t all go entirely to employees. About a third of the money will go toward lawyers representing the workers in the case for their fees.

There also will be other administrative fees to get a payroll company to cut checks for the employees. Federal and state withholding taxes also will be deducted from the amount each employee receives.

“The court indicated that it was good resolution and complimented the trustee and the other parties to come up with a resolution that was reached so quickly,” Williams said.

Barrett devised the deal to pay the employees now before the case is finalized, saying the plan is reasonable and in the best interest of the company, its creditors and former employees.

It 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.

Commercial paper supplier Lindenmeyr Munroe had objected to the deal, but the bankruptcy judge dismissed the objection.

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

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