Coastal Staffing files for Chapter 11 Reorganization Bankruptcy

Coastal Staffing files for Chapter 11 Reorganization Bankruptcy

LAKE CHARLES, LA (KPLC) - Coastal staffing has filed for Chapter 11 reorganization in Federal Bankruptcy Court.  September 15, workers crowded the company's office on Maplewood Drive in Sulphur.  They complained the company owes them money for disaster relief work done in Texas after Hurricane Harvey.  For a man who was there that day, checks were not ready.

Meagan Williams from Beaumont:  "I have a one-year-old daughter at home that has to eat.  That's why I came here.  I came here to make money and they don't want to pay me the money that I worked for."

In the weeks that follow, a spokesman for Coastal says most workers had been paid or would be.  But now the company has filed for Chapter 11 Reorganization in Bankruptcy Court.

Attorney James Sudduth is handling a lawsuit for workers who say they were not fully paid. His reaction to the filing:

"I would say not surprised. And that is because if you actually look at their bankruptcy filing, they list our lawsuit as one of the reasons why they're filing.  In fact, Chapter 11, to be clear, is simply a reorganization.  Coastal is not suggesting they're closing their doors.  They're not suggesting they're going home.  They're simply saying they'd like to stay in business and reorganize to deal with their indebtedness," said Sudduth.

According to court papers, Coastal may have between 5001 and 10,000 creditors, including individuals and businesses and tax collection agencies.  Sudduth says, in addition to pay, they want penalties allowed under labor laws.

"We're seeking what they've been paid, but we're also seeking penalties for the delay in not paying them.  And Coastal continues the delays now with filing for bankruptcy," said Sudduth.

More than 100 workers have joined in Sudduth's lawsuit and he says there's another one in Texas. We have reached out to Coastal Staffing but have not yet received a response from the company.

For more information on what Chapter 11 Bankruptcy is about click here.  We reached out to Coastal Staffing's Office in Sulphur and to the Houston Attorney handling the bankruptcy, but have not yet heard back.  Brian A. Kilmer, of Kilmer Crosby & Walker of Houston, filed the bankruptcy in Bankruptcy Court in Louisiana.

Both sides are due in bankruptcy court on December 21st.

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