By Joel R. Glucksman
| Many New Jersey public entities, already struggling with increasing costs and decreasing revenues, may be facing another fiscal challenge if they used the payroll company Ameripay.
The Ameripay Fraud
Various counties, municipalities, and other public entities turned over their payroll tax deposits to Ameripay, expecting it to remit these funds to the federal and state taxing authorities. Unfortunately, it is alleged that in many cases, Ameripay failed to do so, leaving its clients potentially liable to make good themselves on the missing funds.
In May, 2009, the United States District Court froze Ameripay’s assets and appointed a receiver. On June 25 the receiver obtained an order authorizing him to file a Chapter 7 bankruptcy, which was done on July 9, 2009.
Affected Public Entities Must File a Proof of Claim
In Chapter 7, a bankruptcy trustee will be appointed to organize Ameripay’s assets and pay a dividend to its creditors. Any public entity wishing to receive a dividend must file a proof of their claim in the Bankruptcy Court. Failure to do so in a timely manner will deprive the entity of the right to participate in the distribution of Ameripay’s assets.
Public entities with concerns and questions about protecting their rights in the Ameripay bankruptcy are urged to contact the Scarinci Hollenbeck attorney with whom they work. Questions can also be directed to Joel Glucksman
, Joseph Donegan, or Sheri Siegelbaum