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Bankruptcy Keyed to Levitan, 3rd Ed.
In re Roth American, Inc.
Citation:
975 F.2d 949 (1992)Facts
Roth American, a manufacturer of toys and gym sets, employed over 200 workers represented by Teamsters Local 401. After filing for Chapter 11 bankruptcy on February 2, 1988, the company negotiated a memorandum agreement with the Union that became effective on February 4, 1988. This agreement extended the existing collective bargaining agreement, reduced wages, and included a provision that Roth American would maintain operations in the Wilkes-Barre area for at least two years. Neither party sought bankruptcy court approval for this agreement. Despite the wage concession, Roth American only paid the reduced wage for two weeks before resuming the higher wage rate. On June 5, 1988, approximately four months after the agreement, the company ceased all manufacturing operations and laid off all employees. The Union filed claims for breach of the two-year operations commitment and for vacation and severance pay due under the collective bargaining agreement.
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