Question
Jevic Transportation Corporation filed a petition in a federal bankruptcy court for a Chapter 11 reorganization. A group of former Jevic truck drivers, including Casimir
Jevic Transportation Corporation filed a petition in a federal bankruptcy court for a Chapter 11 reorganization. A group of former Jevic truck drivers, including Casimir Czyzewski, filed a suit and won a judgment against the firm for unpaid wages. This judgment entitled the workers to payment from Jevic's estate ahead of its unsecured creditors. Later, some of Jevic's unsecured creditors filed a suit against some of its other unsecured creditors. The plaintiffs won a judgment on the ground that the firm's payments to the defendants constituted fraudulent transfers and preferences. These parties then negotiated, without the truck drivers' consent, a settlement agreement that called for the workers to receive nothing on their claims while the creditors were to be paid proportionately. [Czyzewski v. Jevic Holding Corp., __ U.S. __, 137 S.Ct. 973, 197 L.Ed.2d 398 (2017)] (See Reorganizations.)
Was it ethical of the truck drivers to obtain a judgment entitling them to payment ahead of the unsecured creditors? Why or why not?
Was it ethical of the unsecured creditors to agree that the workers would receive nothing on their claims? Use the IDDR approach to decide.
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