> Chicken Soup was able to pay back some of those owed wages this week after obtaining a so-called debtor-in-possession loan from HPS, but Pachulski told the court that the loan wasn’t even enough to cover everyone’s health insurance. The company had also failed to make payroll taxes for the past 9 months, and didn’t pay for its employee’s health insurance for 2.5 months prior to filing for bankruptcy.
However, it continued to deduct employee health insurance contributions from paychecks, and allegedly kept 401k contributions as well. “If that’s the case, I find it sickening, frankly, that money was taken from the paychecks from these people, and not put it where it belonged,” judge Horan said Wednesday. “It’s incredibly disturbing.”
“The massive mismanagement … this is beyond the pale of anything I have seen,” agreed Pachulski. “I think what has been done here is criminal, to be very frank.”
