In re DeWitt Rehabilitation & Nursing Center, Inc.
The Debtor, DeWitt Rehabilitation and Nursing Center, Inc., moved to expunge the priority portion of a claim filed by United Staffing Registry, Inc. The Claimant sought priority status for social security, Medicare, and unemployment payments made for temporary employees it provided, citing 11 U.S.C. § 507(a)(5). Bankruptcy Judge Allan L. Gropper analyzed the application of § 507(a)(5) in light of case precedents, including Howard Delivery Service, Inc. The Court determined that the priority under § 507(a)(5) is intended to protect contributions for a debtor's direct employees, and the temporary employees were not employees of DeWitt. Consequently, the Debtor's objection was sustained, disallowing the priority and reclassifying the entire claim as a general unsecured claim, while also denying the Debtor's request for legal fees.