CPI asks court to approve $2.4 million employee settlement agreement

By Kali Hays

New York, March 13 - CPI Corp.'s trustee Charles A. Stanziale has requested preliminary and final approval of a class action settlement agreement between the company and former employees alleging violations of the Worker Adjustment and Restraining Act, according to a Thursday filing with the U.S. Bankruptcy Court for the District of Delaware.

Under the terms of the settlement, all of the current claims from former employees including severance pay, back pay, and any other benefits will be released in exchange for a single claim of $779,144 for headquarters employees and another single claim of $1.63 million for all filed employees.

The class action complaint was filed on May 3, 2013 and accuses the company of not giving 60 days of notice prior to ordering mass layoffs, which is required under the WARN Act.

While the company denies any violation of the WARN act, Stanziale claimed that this is the best course of action as the legal proceedings would be "protracted and expensive to litigate, and the outcomes are uncertain," the filing stated.

A hearing is scheduled for April 16.

CPI, a St. Louis-based portrait studio operator, filed for bankruptcy on May 1, 2013. Its Chapter 7 case number is 13-11158.

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