Single Employer Liability for Investors and Lenders: A WARN-ing from the Delaware Bankruptcy Court

6 September 2011
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Key takeaways 

  • In a recent opinion, the Delaware Bankruptcy Court held that a debtor’s indirect owner and lender was liable with the debtor as a “single employer” for violations of the federal WARN Act. 
  • The decision serves as an important reminder to investors and lenders of their potential exposure to WARN Act liability and the risks they face when becoming involved in a company's decision to terminate employees or close down facilities.