Law v. Law Trucking Co.

Facing financial difficulties, Robert Law, president of Law Trucking Company (Law Trucking) (defendant), persuaded drivers entitled to $12.71/$19.06 hourly wages under a collective-bargaining agreement to instead accept $10/$15 per hour, promising reimbursement if the company later turned a profit; a written agreement and the company's own bookkeeping both characterized the wage concession as a loan rather than wages. When Law Trucking later declared bankruptcy, the drivers claimed the wage concession constituted unpaid back wages entitled to priority status under the Bankruptcy Code, but the trial court found the concession was a loan rather than wages and denied priority status, prompting the receiver's and drivers' appeal.