Former Coda to allow $2 million in claims under WARN Act settlement

By Caroline Salls

Pittsburgh, Oct. 3 - Adoc Holdings, Inc., formerly Coda Holdings, Inc., requested court approval of a settlement reached with claimants under the Worker Adjustment and Retraining Notification (WARN) Act, according to a Wednesday filing with the U.S. Bankruptcy Court for the District of Delaware.

The agreement calls for the WARN claimants to receive an allowed priority claim of $430,000 and a general unsecured claim of $1.57 million.

According to the motion, the Adoc debtors claim they were excused from providing 60 days' notice of a plant closing or mass layoff that began on Dec. 7, 2012 "because the WARN thresholds were never crossed and because they have valid defenses under the unforeseeable business circumstances and faltering company exceptions to the WARN Act."

Meanwhile, a class representative contended that the debtors were not excused from the notice provision.

The Adoc debtors said they "simply do not have the funds at this time to engage in the fact specific litigation that would be required to defeat the WARN Act claims."

The company said its limited resources would be best spent focusing on plan confirmation and liquidation of estate assets.

The company has requested an Oct. 9 preliminary hearing on the settlement and a Nov. 1 final hearing.

Coda, a Los Angeles-based manufacturer of electric cars and energy products based on lithium-ion batteries, filed for bankruptcy on May 1. Its Chapter 11 case number is 13-11153.

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