THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Tuesday, October 24, 1995 TAG: 9510240317
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY CHRISTOPHER DINSMORE, STAFF WRITER
LENGTH: Short : 50 lines
Workers who lost their pay when Jonathan Corp. went out of business in June have asked the Norfolk federal court to make sure they get paid from this week's auction of the shipyard's assets, their lawyer said.
In a motion for injunctive relief filed Monday, the workers are asking for about $250,000 to be set aside from the auction's proceeds to repay them, the workers' lawyer Thomas F. Hennessey said.
Hennessey hopes a hearing can be scheduled today or Wednesday. Jonathan's assets, including its riverfront shipyard, are being auctioned today through Thursday.
Jonathan abruptly went out of business in June three months after it emerged from a bankruptcy reorganization. The Norfolk-based shipyard failed to pay more than 250 laborers for their last week's work.
Those workers have an ``absolute priority'' over other creditors to be repaid under a state law that provides for a laborer's lien, Hennessey said. A lien is a claim on someone's property as security for the repayment of a debt.
NationsBank is auctioning the property based on its lien against all of Jonathan's assets.
Hennessey said he tried unsuccessfully to settle the workers' claim against Jonathan with the bank.
The bank's lawyer, Monroe Kelly III, said he could not comment on the case.
Jonathan closed its doors after it was unable to get enough work to make payments on its debt to NationsBank, becoming the first Hampton Roads shipyard to fall victim to defense downsizing.
At its height in the 1980s, Jonathan employed about 900 people.
Starting at 10 a.m. today, the last vestiges of the once high-flying shipyard will be sold to the highest bidder. The auction is being conducted by MACI Auctioneers International.
Jonathan's property on Norfolk's Front Street will put on the block last, at noon on Thursday.
The 8-acre property, with a tax value of nearly $2.6 million, is encumbered with a $950,000 debt to W. MacKenzie Jenkins of Norfolk. He owns an industrial development bond that is senior to what NationsBank is owed for the property. Any buyer would either have to continue paying on the bond or buy it out. by CNB