Durango Can Make Final Pay, Judge Says; Court Must Clarify Amount to Be Paid

Article excerpt

Byline: Gordon Jackson, Times-Union staff writer

ST. MARYS -- A federal bankruptcy court judge has ruled workers from Durango-Georgia Paper Co. will get their final paychecks, but it's unlikely they can expect to collect any money this week.

Ken Bertram, general manager of Durango-Georgia, said yesterday that Judge Lamar Davis has ruled that the company is authorized to pay workers, but a written court order is necessary to determine how much workers are paid.

"The parties are waiting for clarification of the judge's order so they can calculate what's due and payable at this time," Bertram said.

The judge has to rule whether insurance benefits, vacation pay, sick leave and wages are included as part of the final payoff to workers, he said.

Durango officials were "very concerned" how outstanding medical claims would affect the pool of money available for former employees, Bertram said. The money for medical claims will have to be paid from the cash held in reserve to pay employees their final checks, he said.

More than 900 workers lost their jobs at the St. Marys-based paper mill on Nov. 15. The mill had been one of Camden County's largest employers since 1941.

It was one of several paper mill shutdowns that have occurred across the United States in the past two years, as the weakened paper industry undergoes consolidation.

No matter when they are paid, some workers will not get all the salary and vacation pay owed to them, said Jim Stein, a St. Marys attorney who represented vendors and employees at the hearing.

Federal law puts a cap of $4,650 on the amount of money each worker is paid, Stein said, because the company filed for Chapter 11 bankruptcy last week.

Stein said the company didn't have to file for Chapter 11 bankruptcy but did so to avoid full payment of salaries to workers.

"With the cap on the money, Durango, or whoever holds the money, is going to pay less in wages than they would if they had not filed for the reorganization," Stein said. …