A banking mix-up was behind the stopped payment on paychecks for some employees at the Clover Club snack food factory, a company official said.
Upset employees complained last week that their paychecks from the plant, whose parent company recently sought Chapter 11 bankruptcy protection, were not being honored.Jordan Clements, chief executive officer and president of Clover Club owner Country Club Foods Inc., confirmed that some checks, including paychecks, issued by the company over an approximate two-week period were not paid by banking partner Shawmut Capital.
"At the time the checks were issued, we expected the bank was going to be covering them," Clements said.
But "miscommunications" and "a clamping down" by the Sherman Oaks, Calif., bank just prior to Tuesday's bankruptcy filing created the problem, he said.
Funds were made available Thursday by the bank and payment on the checks or new checks have been authorized, Clements said Friday.
"If anyone is still having a problem, it's a technical one with their local bank," he said. "The funds are fully available."
He said he did not know how many checks were involved. The Kaysville plant employs about 300 workers, with some layoffs expected as part of the company's reorganization.
The bankruptcy filing also delayed checks for some employees who expected payroll checks on Thursday. The court did not approve the checks until a hearing Friday morning, Clements said, and the company was working to get the checks out that day.
"Everything we do now has to be authorized by the bankruptcy court," he said.