CPI trustee gets final approval of $2.4 million employee settlement

By Kali Hays

New York, Aug. 20 – CPI Corp.'s Chapter 7 trustee, Charles A. Stanziale, received final approval of a $2.4 million class action settlement agreement between the company and former employees alleging violations of the Worker Adjustment and Retraining Notification Act, according to a Tuesday order with the U.S. Bankruptcy Court for the District of Delaware.

As previously reported, the settlement requires all of the current claims of former employees involving severance pay, back pay and any other benefits to be released in exchange for a single claim of $779,144 for headquarters employees and another single claim in the amount of $1.63 million for all other filed employees.

The class action complaint filed in May 2013 accused the company of failing to give a 60-day notice prior to ordering mass layoffs, a requirement under the WARN Act.

While the company denies any violation of the WARN Act, Stanziale said the settlement is the best course of action as the legal proceedings would be "protracted and expensive to litigate, and the outcomes uncertain," according to the motion.

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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