The 4th Circuit Court of Appeals in Baltimore reversed the federal court in Spartanburg, S.C., which ordered the employees to abandon their quest for lost benefits.

The appeals court's Aug. 16 ruling paved the way for the employees to seek lost wages, vacation and overtime pay, retirement funds, and health insurance benefits from the remaining assets of Spartan International Inc. - the mill's parent company.

The employees also might be eligible for damages from General Electric Capital Corp., which foreclosed on Spartan.

For former employee Virgil Collett, the relief can't come too soon.

Mr. Collett, 32, was out on medical leave when the mill closed and had to have emergency gallbladder surgery four weeks later. His hospital bill was almost $32,000.

In addition, his 11-year-old daughter, Brittany, was due for studies to determine whether her cancer was still in remission.

Former King Mill worker Virgil Collett and his daughters Marlee (from left), Brittany and Ashley have struggled without health insurance coverage since the mill closed. ANDREW DAVIS TUCKER/STAFF

The Colletts were able to get Medicaid for their three daughters, and Brittany's tests showed the cancer had not returned, but the family is still financially stressed.

Mr. Collett's wife, Peggy Collett, works three days a week and brings home $600 a month.

''Financially, it's killing us,'' she said.

Mr. Collett was one of the 304 mill employees who were thrown out of work without health insurance coverage when GE foreclosed. At the time, Spartan owed GE $35 million.

The employees also were shorted on their 401(k) plan because Spartan did not contribute in 2000 and 2001. The company-funded retirement money also evaporated.

In all, 1,200 mill employees at six plants in Georgia and South Carolina lost their jobs without the 60-day notice required by federal law.

Former employees Ron Walker, 61; Betty Cushman, 60; Roy Poole, 60; Leroy Kimble Jr., 57; Margaret Spires, 59; and Willie Spivey, 62, say they are too old to find other jobs and too young for Social Security.

They find themselves in desperate straits; their unemployment checks will run out in October.

Some, such as Donna Hughes, have life-threatening health problems, but without health insurance they cannot afford to buy medicine.

For these people, the Aug. 16 ruling is critical.

IN A UNANIMOUS DECISION, the 4th Circuit judges said the employees had been wronged by GE,which had a receiver appointed to liquidate Spartan's assets and pay GE without notice to other creditors.

They also were wronged when GE and receiver Peter Tourtellot, whom GE had appointed by the federal court in Spartanburg to liquidate Spartan's assets, went to court to stop the employees' involuntary bankruptcy petition.

And South Carolina District Judge Margaret B. Seymour erred when she held the employees in contempt for filing the petition, which would have allowed the bankruptcy court in Augusta to decide who gets what instead of allowing the receiver to sell everything and turn the money over to GE.

''There are 1,200 claims that could be filed against General Electric and the receiver in the bankruptcy court because of what the receiver did in trying to stop this involuntary bankruptcy,'' Louis Saul told the 54 employees in the suit at a meeting last week. Mr. Saul is one of three Augusta lawyers handling the case.

From the questions the three 4th Circuit appellate judges asked, Mr. Saul said, it was apparent that they were not pleased by the way the employees were treated and the way the plant was closed.

''And it was unusual, if not very unusual, that those three judges came to Baltimore off of vacation,'' he said.

''They spent a lot of time, and they asked questions, and the questions couldn't be answered by the other side. So there should not have been a restraining order against you, and the bankruptcy should have gone forward.''

Mr. Saul said he and attorneys John B. Long and James T. Wilson Jr. don't know what happened between Spartan's owner and GE before GE foreclosed, because the receivership kept them from finding out.

They also don't know what negotiations took place with Standard Textile, the company that bought the equipment in King Mill for $4.2 million and reopened the plant. But the lawyers expect they will find out once the case is in bankruptcy court.

''It may take six months, but we'll find out what really happened here,'' Mr. Saul said.

Meanwhile, the employees in the suit must supply the attorneys with documentation of their claims and damages they have suffered because of the injunction filed against them that delayed their case in getting to bankruptcy court.

Suit benefits

All former Spartan International employees, including 304 King Mill workers, who join the involuntary bankruptcy suit in Augusta are eligible for some or all the following:

Claims for two months' wages and two months' extension of health insurance coverageAll medical bills exceeding deductible or co-payment amounts that did not get processed and paid before the plants closed

Vacation, overtime and sick pay, if entitled, if money is left after General Electric Capital Corp. is paid

Employee Stock Ownership Plan money if it can be shown that the funds were mishandled or that Spartan International owners sold their ESOP stock six months to a year before the plant closed

401(k) money for the contributions Spartan did not make to employees' accounts in 2000 and 2001

Damages from the lawsuit against GE, the receiver Peter Tourtellot and his South Carolina attorney for violation of the employees' rights for seeking and receiving an injunction to stop them from filing involuntary bankruptcy; also, actual damages for being held in contempt of the U.S. District Court in Spartanburg

Reach Sylvia Cooper at (706) 823-3228 or sylviaco@augustachronicle.com.