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Staffing firms offered legal analysis on ECG proceedings

July 21 2009

Staffing firms that are continuing to face the brunt of the Ensemble Chimes Global bankruptcy now have access to some legal analysis in the ongoing legal proceedings. The American Staffing Association is providing a whitepaper outlining potential arguments and defenses that may be available to staffing firms. This comes in the wake of the letters that went out in May to staffing firms and others for return of monies paid out by vendor management system ECG up to 90 days prior to its filing for bankruptcy protection in January 2008.

Bankruptcy trustee Howard Ehrenberg reported that between 700 and 1,000 staffing firms were among those receiving the letters, known as "inquiries/demand letters for preference." 

ECG at one time ranked as the largest VMS. It filed for bankruptcy protection shortly after its parent company, Axium International Inc., a provider of payroll services to the entertainment industry, did the same.

The Chimes legal analysis, prepared for ASA by bankruptcy experts Lee W. Stremba, Esq., and Katherine Ash, Esq., of Troutman Sanders LLP, discusses several potential arguments that may be available to staffing firms to defend against the preference claims.

You can read the Chimes legal analysis at www.americanstaffing.net.

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