Oct 31, 2008 7:50 pm US/Pacific
Fate Of Mervyn's Workers' Benefits Remains Unclear
HAYWARD (CBS 5) ―
Some 600 former employees of Hayward-based retailer Mervyn's will have to wait several more weeks to find out if they'll get their accrued vacation pay, according to an agreement reached in a Delaware bankruptcy court on Thursday.
The former employees expected last week to be paid the weeks of vacation pay they are owed, but creditors' demands stopped that process. According to the agreement, they should still get paid, but they are going to wait several weeks at least.
Jackie Chakoff of Moraga is one of those employees who are waiting. Chackoff planned to resign early to make sure she got her vacation back pay. But she and others stayed an extra week after the company assured them they would get the money. Now they're in limbo. Chakoff wishes she had quit when she had the chance to walk away with her vacation pay immediately.
"It's tough out there right now, there are a lot of people affected, over 18,000 employees at Mervyns not just corporate headquarters but all the stores people, nobody saw this coming," she told CBS 5 Investigates. "And had they, I am sure a lot of people would have made different decisions."
So why are they still going to have to wait to find out about their money? Because now, as spelled out in the court order from the Delaware bankruptcy judge, those payments won't be made until after those going out of business sales are over.
Why? Because creditors, including Wachovia Bank that fronted money to Mervyn's, want to make sure there's enough money left after the sales to pay them, too.
Also, this is all dependent on whether Mervyn's makes as much money as it expects to in those closing sales. If they make enough money, the employees get paid. If not, there is still a bit of a question whether the employees could get stuck.
The irony is that no matter what, the top executives still working at the company managers will get their retention bonuses and vacation pay, guaranteed.
(© MMIX, CBS Broadcasting Inc. All Rights Reserved.)
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