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Recruiters Facing Law Suits

Recruiters Facing Law Suits

Reports from the US state that around 750 lawsuits have been filed, many against recruitment firms regarding the outstanding claims in the bankruptcy case of defunct vendor management system provider Ensemble Chimes Global. The deadline for filing a suit was last week.

Under US bankruptcy law, funds paid out by Ensemble Chimes back to 90 days before it filed for bankruptcy may have to be returned.

Ensemble Chimes was reported to be the largest vendor management system before filing for bankruptcy in January 2008 shortly after its parent company, Axium International Inc., abruptly ran out of money and filed for Chapter 7 bankruptcy, which is liquidation rather than reorganization. What remained of Ensemble Chimes was sold out of bankruptcy January 23, 2008, followed by the rest of Axium a week later.

Given the prolonged downturn for the staffing industry in the UK, paid when paid clauses and credit protection this case begs the question could it happen in the UK?

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