Former Gourmet Heaven owner Chung Cho filed for bankruptcy on Wednesday, forcing a federal court to put on hold a lawsuit six former employees filed against him.
Cho, who in 2013 was accused of withholding $218,000 in unpaid wages from two dozen employees, finished repaying his ex-workers this June. But six former employees took Cho to court again in early September, this time alleging that Cho retaliated against them for cooperating with the state Department of Labor’s wage theft investigation. The employees sought $125,000 compensation, in accordance with federal labor laws.
The U.S. District Court in Hartford hearing the retaliation suit was forced to suspend the charges against Cho in light of his bankruptcy, leaving Gourmet Heaven Inc. the sole defendant in the case.
But at a Friday morning hearing originally intended to settle the lawsuit, Cho’s lawyers argued to indefinitely postpone the case, since Gourmet Heaven Inc. is an asset belonging to an individual who filed for bankruptcy.
“Gourmet Heaven may have different bank accounts, assets and other obligations separate from those Chung Cho had,” said attorney James Bhandary-Alexander, who represents Gourmet Heaven’s former employees. “We are pursuing claims against both of them because they are both responsible under the law for the unpaid wages.”
Bhandary-Alexander said Cho and his attorneys appeared willing to settle the case at $125,000 weeks before the Friday hearing. But Cho’s attorneys stopped answering calls around a week and a half ago, Bhandary-Alexander said.
Bhandary-Alexander added that the six employees learned Cho filed for bankruptcy just days before the Friday hearing. On Thursday, Bhandary-Alexander filed court documents arguing the entire case should not be postponed.
Cho’s attorney did not return a request for comment.
One plaintiff — who requested anonymity to prevent his current employer from discovering he took legal action against his former employer — expressed exasperation with the lawsuit’s proceedings. The plaintiff said he doubts Cho will pay the dues he owes to his ex-workers.
“I’m distressed,” the plaintiff said. “We’ve spent a lot of time on the case, almost two years, and if he doesn’t want to pay he won’t pay.”
The court may take weeks to decide whether the retaliation lawsuit should be postponed in its entirety, Bhandary-Alexander said.
Nevertheless, the plaintiffs will soon submit documents to the bankruptcy court asking them to ensure Cho pays all $125,000 of the compensation they seek, said Bhandary-Alexander.
Throughout this case, Cho maintained he has no personal assets, said Bhandary-Alexander. But Cho’s petition for bankruptcy estimates he owns between $1 million and $10 million worth of assets. Cho also noted that he owes between $1 million and $10 million worth of debt, most of which is consumer and not business debt.
A portion of Cho’s estimated debt, Bhandary-Alexander added, could include the $125,000 Cho’s six former employees were seeking, but there is no way for him and his clients to confirm this. The bankruptcy court will determine the true nature of Cho’s assets and the debts he will repay, Bhandary-Alexander said.
“The question of whether this is a legitimate bankruptcy petition or an illegitimate bankruptcy petition is likely to be answered in bankruptcy court,” Bhandary-Alexander said.
Students interviewed expressed dismay that wage theft has been occurring so close to campus.
One law student said the practice is especially troubling because of the disproportionate impact it has on undocumented workers.
“Wage theft is a huge problem for the undocumented community, and it is an absolutely deplorable practice,” said Tiffany Bailey LAW ’17. “The federal government needs to step in and prevent the exploitation of this already vulnerable group of people.”
Ownership of both New Haven Gourmet Heaven locations was transferred to Good Nature Market in March 2015.