European company went bankrupt - will I get paid (England)

[u/MatGrinder]

As above. I am not technically an employee of the company but a supplier providing services. Worked there for 15 years. They suddenly wound up 7 days ago so many of us in various European countries are now jobless. I am owed 2 months of invoices. The CEO says he will pay tomorrow but if the company wound up a 7 days ago, is that even possible?

If I don't get paid then does anyone have any idea how this would work crosa-border in terms of solving this pay issue? What are my options? The company are headquartered in Luxembourg.

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[u/Philip3197]

So you are not an employee but a supplier. Your invoice should be added with all other invoices that are not paid yet. They will be (partially) paid according to the legal rules in luxemburg.

[u/gdvs]

Someone will be assigned to manage the bankruptcy. They'll try to get money they've been owed and they will try to pay what they need to pay. There's a creditor order of priority. Real employees would typically have a higher priority.

https://e-justice.europa.eu/topics/money-monetary-claims/insolvency-bankruptcy_en

"In all cases, as soon as the proceedings are formally opened, creditors can no longer take individual action to reclaim their debts. This is to ensure all creditors are on an equal footing and protect the debtor's assets.

To be paid, creditors must prove their claims, either to the court or to the body (generally an administrator or liquidator) responsible for reorganising or liquidating the debtor's assets. In specific circumstances, this can be done by the debtor themself."

[u/Fuzzy-Moose7996 → u/gdvs]

Correct. And there's a strict hierarchy as to who gets paid and in what order.

Government is first, meaning taxes and reclaimed subsidies mostly. Plus prepaid services not yet delivered (not that the governments tend to prepay for stuff).
Then it's banks and insurance companies.
Employees and contractors are at the bottom of the barrel, usually get little if anything.

[u/WunkerWanker → u/Fuzzy-Moose7996]

A strict hierarchy indeed. But it is far more complex than this and some things you said are completely wrong (like employees being last, or governments being first). So yeah, better to say nothing then to give false advice.

This is the common hierarchy:

1. Secured Creditors

These are banks or other lenders with collateral (e.g., mortgages, liens). They are first in line when the asset they hold security over is sold.

2. Insolvency Costs / Administrative Expenses

Includes court costs, liquidator/administrator fees. These get paid before almost anyone else from the insolvent estate.

3. Preferential Creditors

This group includes:

• Employees: In most EU countries, wages owed to employees are treated as preferential claims, they are NOT at the bottom.
• Tax authorities: Some EU countries give preferential status to tax debts, others don't. It depends on national law.
• In some systems, social security payments also get preferential treatment.

4. Unsecured Creditors

Includes most trade creditors, suppliers, contractors (unless they are secured). Insurance companies likely fall into this category unless they have a secured claim.

5. Subordinated Creditors

These include certain intra-group loans, shareholder loans, or penalties.

6. Shareholders

Always last. They typically get nothing in insolvency.

And most importantly, not the entity to who the debt is owned determines if it is higher up the hierarchy, it is the type of debt that determines it. If a bank has some bank fees or unsecured loans, like credit card loans, to claim, it is not preferential in any way to other unsecured creditors.

[u/Quirky-Plantain-2080 → u/WunkerWanker]

Previous guy isn’t wrong, just not very clear.

There is a difference between secured and unsecured debt. In the case of secured debt, the creditors get a claimed on the secured property. With secured debt the creditor „escapes” the debt sequencing because they basically can point to a property and say, „that’s mine”.

So in a sense you’re technically not talking about the same stuff as guy above.

The unsecured debts then go in order of priority, with people in the same group ranking parri passu. So #2-6 is correct.

[u/WunkerWanker → u/Quirky-Plantain-2080]

He just said things that are wrong: The government is not in all countries first, and always behind the curator. And employees are certainly not last, assuming we are talking about unpaid wages. They are actually preferential.

And stating that banks (and insurance companies??) are second is misleading, since you assume it matters what type of entity it is. While your family member could have given you a mortgage and be just in the same position as a bank. If we are even talking about mortgages. Because if we are talking about normal claims, we are talking about the same positions as an unpaid contractor. And insurance companies usually don't have secured debt either, so they are also in the same category as the unpaid contractors.

And this is a legal sub. So it is better to say nothing than 50% nonsense.

[u/Fuzzy-Moose7996 → u/WunkerWanker]

What I wrote is exactly what we were told when a company I worked for went bankrupt.

[u/WunkerWanker → u/Fuzzy-Moose7996]

Well, then you were told false information.

And this is exactly why reddit sucks and you should never take anything on here seriously. People without knowledge stating hearsay as facts.

[u/Fuzzy-Moose7996 → u/WunkerWanker]

I wasn't told false information. This was a person trained and licensed for the work, a legal expert unlike someone like you who just wants to flex muscles online.

[u/WunkerWanker → u/Fuzzy-Moose7996]

That surely sounds like an expert. And in fact, yes, I do have a unviersity law degree. With my master degree being specialized in corporate law, which includes insolvency law.

I don't want to flex muscle. I don't want people to read things and assume they are correct. While they are false.

Are you also going to give medical advice without being a doctor next? And then tell the doctors you just heard it from someone, so why would they care you are giving bad advice?

[u/SchoolForSedition]

Find out who is winding the company up and claim your money. You may eventually get tuppence in the euro or whatever.

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[u/0xPianist]

You need to wait for bankruptcy to do the admin and probably recover a part of your salary.

Push the guy to pay you asap before they take over since it’s salary 👉