Lawyers prepare Spartan suits
Attorneys build cases on behalf of former mill employees to regain benefits lost with closings
Lawyers in two similar cases surrounding Spartan International have been sharing notes. They hope to regain for their clients health benefits and other losses associated with the shutdown of Spartan International's mills.
The local complaint will be heard Wednesday.
A total of 1,200 employees at six plants, including Augusta's King Mill, were abruptly put out of work May 4 when the struggling Spartan International ceased operations.
The Spartanburg, S.C.-based company did not file for bankruptcy protection. Jack Long of Augusta's Dye Tucker Everitt Long Brawton & Lanier, who is representing a contingency of former King Mill employees, hopes to have Spartan forced into a Chapter 7 involuntary bankruptcy status.
U.S. District Bankruptcy Judge John Dalis has set an emergency hearing on the motion for 9 a.m. Wednesday in Augusta.
Mr. Long contends General Electric Capital Corp., the major creditor behind Spartan International, persuaded Spartan to move assets into receivership in order to ''pay (GE) first, not the employees.''
Mr. Long said he wants the judge to appoint a trustee to continue Spartan International's employee benefit plan. The company was self-insuring when its assets went into receivership, leaving employees without health coverage.
Under the Consolidated Omnibus Budget Reconciliation Act, commonly known as COBRA, the employees should have had the option to extend their benefits if they wished to continue making payments on their own.
''I told (GE and Spartan) if they agreed to fund the benefits, we would not sue,'' Mr. Long said.
Attorneys for Spartan are expected to offer arguments Wednesday as to why benefits shouldn't be extended.
A more sweeping complaint has been filed in Union County, S.C. Michael R. Williams, a former sales representative and 28-year employee of Spartan International, has filed a civil suit seeking class-action status against Spartan International, two of its senior officials and GE.
The suit alleges a conspiracy between Spartan and GE to intentionally overreach and violate loan documents. The suit implies the defendants all benefited financially at the expense of employees, but does not elaborate.
''It presumably covers all people laid off, plus those who retired,'' Mr. Williams said. He said Mr. Long has been in contact with his two attorneys.One of them, Amy Balcomb, declined comment.
There has been no response by GE or any other defendant in the class-action suit, according to Union County's clerk of court.
A lawsuit represents only one side of a dispute.
Reach Eric Williamson at (706) 828-3904.