The Woodlands

Coastal Staffing Services, LLC Reorganization

February 1, 2020

Quadros, Migl & Crosby is pleased to announce the recent confirmation of the plan of reorganization for its client Coastal Staffing Services, LLC (“Coastal”) by the Honorable John W. Kolwe in the Western District of Louisiana.

Coastal is a premier staffing company specializing in providing complete employee-related services for a diverse client base in various locations across the United States and across a wide array of industries. As a result of Hurricane Harvey and various difficulties arising out of the associated cleanup, Coastal was facing a significant number of lawsuits alleging violations of the Federal Labor Standards Act and associated state wage laws—as well as a significant number of potential claims—in amounts that threatened the continuing viability of the company. As a result of the potential deluge of claims, Coastal sought Chapter 11 bankruptcy protection to ensure that any valid claims were fairly paid, but also to provide for the long term continued operations and growth of Coastal, which was the only way that creditors would get paid in full.

As a result of negotiations among its creditor group (who were asserting claims in excess of $5,000,000) and Coastal, the Debtor was able to reach a settlement of the alleged claims in an amount that was less than 10% of the amounts being asserted by the creditors. As a result of these successful negotiations, Coastal was able to formulate and confirm a plan of reorganization with the unanimous support of its creditors and that provided for: 1) full payment to all creditors—with all creditors being paid in full within 30 days of the effective date of confirmation; and 2) continuation of Coastal’s successful operations post-emergence from bankruptcy protection.