ATLANTA — Hundreds of employees are left in the lurch, unpaid for their work at a relatively new news outlet. Black News Channel filed for bankruptcy last month, and since then, workers have reported not getting paid for weeks. While the company is based in Florida, dozens of its workers live in the Atlanta area.
Dellan Sellers did social media work for BNC. After two rounds of layoffs within a month, along with what Sellers called poor communication about the company folding, she left BNC in February this year, nine months after starting.
“I no longer felt safe at that point," Sellers said. "I could tell there was something going on, something they weren’t communicating to us. So, I felt like it was time for me to protect myself and get out while I could before everything came crumbling under me.”
Last month, BNC announced it would file for chapter 11 bankruptcy and cease operations. Thursday night, the company said it would not be able to pay workers for the week of March 19-25 as previously promised. Those payments were expected Friday, April 8.
Attorney Gary Freed said workers are able to file what's called a priority claim with federal bankruptcy court, which can take up to 30 days to process. There is also a limit on how much the court can pay out. Freed said the court can use a preferential payment or transfer and take bonuses or other payouts doled out in the last year to company leadership to cover the cost of unpaid checks to employees.
"That presupposes they actually have money to pay, because the bankruptcy court can’t get blood out of a turnip," Freed said. "If they don’t have the money, the court and a trustee can look backwards into the funds of the company and where they went.”
BNC launched in February 2020, just before the pandemic started. But financial woes would soon doom the venture, especially after major stakeholder Shad Khan pulled his funding. Khan also owns the Jacksonville Jaguars.
“When you file for bankruptcy, there’s an automatic stay," Freed said. "Everything stops, it’s a freeze frame. From that point forward, the court has jurisdiction over the debtor, and the debtor can’t do things without court permission. It’s unfortunate this is the way the system works, to protect a business from defaulting on payments.”
11Alive obtained a BNC email sent out to employees Thursday night, stating in part:
"Unfortunately, by virtue of filing for Chapter 11, we must be granted permission by the court to pay anyone, including the remaining earned but unpaid wages to all of you. So, though it was communicated that unpaid wages would be paid on April 8th, we have been informed that this cannot occur. Our commitment to reconciling this through the required legal process is ongoing and absolute. Be assured that this procedural matter has our total attention, and we will stay in close contact with you as this process is completed.
We do recognize the hardship this delay may cause and thank you for your continued patience during what is understandably a challenging and difficult time for everyone."
Sellers said the payments can't come soon enough to spell relief for hundreds of her former coworkers, several of whom are struggling just to pay their bills.
"They still have bills due, children they have to feed, so they’re relying on this money," Sellers said. "Everybody knows what’s going on, but bill collectors don’t care. They just want to know when that money is coming in. It’s like everybody is drowning in this anxiety, this what-if. But a lot of people are trying to remain positive.”
Other news outlets have reached out to former BNC employees, alerting them of job openings. The National Association of Black Journalists is also offering free membership for former BNC employees who lost their jobs.
BNC said it was working to get restructured and possibly become a viable business again. But Freed said 80% of companies that file for bankruptcy eventually fail.