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IN THE UNITED STATES BANKRUPTCY COURT FOR THE EASTERN DISTRICT OF NORTH CAROLINA WILSON DIVISION In re: AMERICAN AMBULETTE & AMBULANCE SERVICE, INC.,
Debtors

Case No. 13-07673-8-SWH (Chapter 7)

BRANDEN ENGLE, JUSTIN BAGE and JOHN ROSENBAUM, on behalf of themselves and all others similarly-situated, Plaintiffs, v. AMERICAN AMBULETTE & AMBULANCE SERVICE, INC. (d/b/a MEDCORP, d/b/a LIFE AMBULANCE), COASTLINE CARE, INC., EASTERN SHORE ACQUISITION CORPORATION, EASTERN SHORE AMBULANCE, INC., MARMAC TRANSPORTATION SERVICES, INC., TRANSMED, LLC, (f/k/a FIRST MED EMS), ENHANCED EQUITY FUNDS, ENHANCED EQUITY FUND II, and AMBULANCE HOLDINGS LLC, Defendants.

ADVERSARY PROCEEDING Case No.

COMPLAINT _____________________________________________________________________________ Plaintiffs Branden Engle, Justin Bage, and John Rosenbaum (Plaintiffs)1, allege on behalf of themselves and the class of those similarly-situated, as follows: NATURE OF THE ACTION 1. Plaintiffs bring this action against debtors American Ambulette & Ambulance

Service, Inc. (d/b/a Medcorp, d/b/a Life Ambulance), Coastline Care, Inc., Eastern Shore
1

To date, undersigned counsel has been retained by more than 300 former employees.

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Acquisition Corporation, Eastern Shore Ambulance, Inc., MarMac Transportation Services, Inc., and TransMed, LLC (f/k/a First Med EMS) (together, the FirstMed Debtors) and non-debtor ultimate parents Enhanced Equity Funds, LP, and Enhanced Equity Fund II, LP (collectively EEF or the EEF Defendants), and non-debtor parent Ambulance Holdings, LLC, (together, the Non-Debtors, and collectively with FirstMed Debtors, the Defendants or FirstMed). 2. FirstMed was an ambulance service provider that operated in six states, was the

largest provider of EMS services in Ohio, and was owned and controlled by EEF as a single

business enterprise. Plaintiffs worked for the Defendants at their Ohio and Virginia facilities until their termination on or about December 6, 2013. In shutting down, Defendants terminated approximately 2,000 similarly-situated employees along with Plaintiffs, all without advance notice. 3. On December 6, 2013, EEF officers specifically directed the FirstMed Debtors to

shut down and file for Chapter 7 protection. EEF did so as the single employer with FirstMed without providing 60 days notice of the shutdown to those employees in violation of the Worker Adjustment and Retraining Notification Act (WARN Act), 29 U.S.C. 2101 et. seq. 4. Defendant EEF, a private equity firm, aspired to create an ambulance service

enterprise by acquiring companies in that sector across six states. To that end, EEF first acquired ambulance companies through its subsidiary Eastern Shore Acquisition Corporation ("ESAC"), specifically, Eastern Shore Ambulance, Inc., MarMac Transportation Services, Inc., and TransMed, LLC, operating in the states of Virginia, North Carolina, and South Carolina. 5. Between 2010-2011, EEF acquired Life Ambulance in Ohio and then bought the

assets of Medcorp out of bankruptcy. It housed these entities under the corporate name of American Ambulette & Ambulance Service, Inc., a small company EEF acquired to utilize its

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Medicaid and Medicare billing numbers. These companies operated in Ohio, Kentucky and, West Virginia (until recently when West Virginia's operations shifted to ESACs oversight). 6. Upon information and belief, EEF put all of the operating units under the

umbrella of a corporate shell called Ambulance Holdings, LLC (Holdings), in which it was the majority (approximately 80%) shareholder. 7. Upon information and belief, Defendant EEFs ex-Managing Partner Christopher

Garcia arranged these acquisitions. 8. Upon information and belief, EEF planned the consolidation of MedCorp with

FirstMed, Inc., and EEFs Garcia said, We feel confident that ... we can quickly restore MedCorp to profitability and preserve MedCorp as a going concern. 9. Upon information and belief, EEF Principal Samarth Chandra was the EEF point

person who took an active role in managing the entities, visiting their sites and supervising the executives it hired to run them. 10. Upon information and belief, the board of Holdings (the board) once comprised

five members, but shrank to three, of whom EEF Co-Founder and Managing Partner Andrew M. Paul and Chandra were the majority members, as of late-fall 2013, and comprised only Paul and Chandra by the time its petition was filed. 11. entities. 12. On or around July 31, 2013, EEF replaced former FirstMed interim CEO Chris Upon information and belief, the Holdings board controls of all the FirstMed

Martin with a new CEO, Bryan Gibson. Andrew Paul announced EEF was entering into a partnership with Gibson. Gibson had been an executive of bankrupt Rural Metro Ambulance.

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13.

Although the ESAC side of FirstMed was profitable and had never lost money,

the Ohio operations were unprofitable and were pulling down the enterprises performance. As a result, FirstMed conducted several reductions in force in the Ohio region in 2013. 14. Upon information and belief, in the fall of 2013, an advisor De Novo Perspectives

was retained to assist in creating a restructuring plan at the instance of senior secured lender Bank of Montreal. 15. On or around October 1, 2013, Chris Martin, who had resumed his position of

President and COO and had been reporting directly to the board, resigned. 16. 17. In the fall of 2013, FirstMed shed more business by closing stations in Ohio. Approximately 90 days before the shutdown, upon information and belief,

FirstMed began transferring a significant number of its ambulances and related equipment from its Ohio operations to Alabama, where Bryan Gibson owns Shoals Ambulance, Inc., and to Tennessee, where Gibson had run Priority EMS, Inc. 18. Upon information and belief, at this time, employees also were directed to sell-off

or scrap older FirstMed ambulance assets, which they did at less than market value. 19. In the weeks prior to filing the petition, Samarth Chandra, with FirstMeds CEO

Gibson and CFO Shawn Heming and others, engaged in negotiating the terms of a restructuring plan with senior secured lender Bank of Montreal. 20. At around 6 p.m. on Friday, December 6, 2013, Gibson convened a conference

call with executive officers and instructed them to shut down the company immediately and terminate its employees. Gibson stated this was a directive of the board. 21. In implementing the shutdown over that weekend, employees were locked out and

given no information. They received no written notice but rather were informed by conference

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calls and other means. They have not been paid their final checks. They understand premiums for their health coverage, which were due on the first of December, were not paid. As a consequence, their health insurance could lapse at any moment, making them unable to obtain necessary mediation or medical treatment, and making them subject to paying for necessary prescriptions and medical procedures they cannot afford, especially without income. 22. On or after December 10, 2013, certain employees received letters postmarked

December 8 or December 12 containing a letter dated December 6, stating they were being terminated. The letters did not give them information regarding the status of their health insurance coverage. 23. Plaintiffs bring this action on behalf of themselves and other similarly-situated

former employees who were terminated without cause by Debtors as a single employer with nondebtor Defendants EEF and Holdings, as part of, or as the foreseeable result of, plant closings or mass layoffs and who were not provided 60 days advance written notice of their terminations, as required by the Worker Adjustment and Retraining Notification Act, 29 U.S.C. 2101 et. seq. 24. Plaintiffs on behalf of all similarly-situated employees seek to recover 60 days

wages and benefits, pursuant to the WARN Act, from Defendants. Plaintiffs bring this action against non-Debtor EEF whose principals, through its single purpose corporate shell, Holdings, directed the subsidiaries to shut down, terminate their employees, and file for bankruptcy. As detailed herein, Defendant EEF made these decisions as the single employer with its subsidiaries. 25. Plaintiffs on behalf of all similarly-situated employees seek all unpaid wages,

including accrued vacation amounts, under the payment of wages laws of each state in which they worked.

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26.

Plaintiffs WARN claim, as well as the claims of all similarly-situated employees,

is entitled to partial administrative expense status pursuant to the United States Bankruptcy Code 503(b)(1)(A) and partial, or alternatively, full priority status under 11 U.S.C. 507(a)(4) and (5), up to the $12,475 priority cap, with the balance, if any, being a general unsecured claim. 27. Plaintiffs unpaid wages claims are entitled to full priority status under 11 U.S.C.

507(a)(4) and (5), up to the $12,475 priority cap. JURISDICTION AND VENUE 28. This Court has jurisdiction over this adversary pursuant to 28 U.S.C. 157,

1331, 1334, 1367, and 29 U.S.C. 2104(a)(5). 29. 30. This is a core proceeding pursuant to 28 U.S.C. 157(b)(2)(A), (B), and (O). Venue in this Court is proper pursuant to 28 U.S.C. 1408, 1409. THE PARTIES Plaintiffs 31. Plaintiff Branden Engle was employed by Defendants and worked at the

Defendants facility located at 745 MedCorp Drive, Toledo, Ohio, (the Toledo Facility) until his termination on or about December 6, 2013. 32. Plaintiff Justin Bage was employed by Defendants and worked at the Toledo

Facility until his termination on or about November 20, 2013. 33. Plaintiff John Rosenbaum was employed by Defendants and worked at the facility

of Defendants at 3303 Airline Blvd., Portsmouth, Virginia, until his termination on December 10, 2013. Defendants

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34.

Upon information and belief at all relevant times, American Ambulette &

Ambulance Service, Inc. (d/b/a Medcorp, d/b/a Life Ambulance); Coastline Care, Inc.; Eastern Shore Acquisition Corporation; Eastern Shore Ambulance, Inc.; MarMac Transportation Services, Inc.; and TransMed, LLC (f/k/a FirstMed EMS), are incorporated in North Carolina and located at 379 North Front Street, Wilmington, North Carolina, and maintain and operate numerous facilities (Facilities) as that term is defined by the WARN Act, where they employed the Plaintiffs and all similarly-situated employees. 35. Upon information and belief, at all relevant times Enhanced Equity Fund, LP, is

incorporated in Delaware and maintains headquarters at 601 Lexington Avenue, New York, New York. 36. Upon information and belief, at all relevant times Enhanced Equity Fund II, LP, is

incorporated in Delaware and maintains headquarters at 601 Lexington Avenue, New York, New York. 37. Upon information and belief, at all relevant times Ambulance Holdings, LLC, is

incorporated in Delaware. 38. Upon information and belief, Defendants comprise a business enterprise that

together operated their business as a single employer. 39. Until on or about December 6, 2013, the Plaintiffs and all similarly-situated

employees were employed by Defendants and worked at or reported to one of the Facilities until they were terminated permanently. 40. On December 10, 2013, Plaintiff Engle filed this complaint, in substantially the

same form, against FirstMed EMS, LLC, in the U.S. District Court for the Eastern District of North Carolina, CV 13-00263.

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41.

On December 11, 2013, FirstMed Debtors filed voluntary petitions for relief

under chapter 7 of the United States Bankruptcy Code. FEDERAL WARN ACT CLASS ALLEGATIONS 42. Plaintiffs bring this Claim for Relief for violation of federal WARN Act, 29

U.S.C. 2101 et seq., on their own behalf and on behalf of all other similarly-situated former employees, pursuant to 29 U.S.C. 2104(a)(5) and the Federal Rules of Civil Procedure, Rule 23(a) and (b), who worked at or reported to one of Defendants Facilities and were terminated without cause on or about December 6, 2013, and within 90 days of that date, or were terminated without cause as the reasonably foreseeable consequence of the mass layoffs and/or plant closings by Defendants on or about December 6, 2013, and who are affected employees, within the meaning of 29 U.S.C. 2101(a)(5) (the WARN Class). 43. The persons in the WARN Class identified above (WARN Class Members) are

so numerous that joinder of all members is impracticable. Although the precise number of such persons is unknown, the facts on which the calculation of that number can be based are presently within the sole control of Defendants. 44. The identity of the members of the class and the recent residential address of each

of the WARN Class Members is contained in the books and records, including electronic records, of Defendants. 45. Upon information and belief, the rate of pay and benefits that were being paid by

Defendants to each WARN Class Member at the time of his or her termination is contained in the books and records, including electronic records, of the Defendants. 46. Common questions of law and fact exist as to members of the WARN Class,

including, but not limited to, the following:

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(a)

whether the members of the WARN Class were employees of the Defendants who worked at or reported to Defendants Facilities; whether Defendants unlawfully terminated the employment of the members of the WARN Class without cause on their part and without giving them 60 days advance written notice in violation of the WARN Act; whether Defendants unlawfully failed to pay the WARN Class members 60 days wages and benefits as required by the WARN Act; and whether Defendants as a single employer violated the WARN Act.

(b)

(c)

(d) 47.

The Plaintiffs claim is typical of those of the WARN Class. The Plaintiffs, like

other WARN Class members, worked at or reported to one of Defendants Facilities and were terminated without cause on or about December 6, 2013, or within 90 days of that date, due to the mass layoffs and/or plant closings by Defendants. 48. The Plaintiffs will fairly and adequately protect the interests of the WARN Class.

The Plaintiffs have retained counsel competent and experienced in complex class actions, including the WARN Act and employment litigation. 49. Class certification of these claims is appropriate under Fed. R. Civ. P. 23(b)(3)

because questions of law and fact common to the WARN Class predominate over any questions affecting only individual members of the WARN Class, and because a class action is superior to other available methods for the fair and efficient adjudication of this litigation particularly in the context of WARN Act litigation, where individual plaintiffs may lack the financial resources to vigorously prosecute a lawsuit in federal court against a corporate defendant, and damages suffered by individual WARN Class members are small compared to the expense and burden of individual prosecution of this litigation. 50. Concentrating all the potential litigation concerning the WARN Act rights of the

members of the Class in this Court will obviate the need for unduly duplicative litigation that

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might result in inconsistent judgments, will conserve the judicial resources and the resources of the parties, and is the most efficient means of resolving the WARN Act rights of all the members of the Class. 51. Plaintiffs intend to send notice to all members of the WARN Class to the extent

required by Rule 23. CLAIMS FOR RELIEF FIRST CAUSE OF ACTION - WARN ACT 52. paragraphs. 53. At all relevant times, Defendants employed more than 100 employees who in the Plaintiffs reallege and incorporate by reference all allegations in all preceding

aggregate worked at least 4,000 hours per week, exclusive of hours of overtime, within the United States. 54. At all relevant times, Defendants were an employer, as that term is defined in

29 U.S.C. 2101(a)(1) and 20 C.F.R. 639(a), and continued to operate as a business until it decided to order mass layoffs or plant closings at the Facilities. 55. At all relevant times, Defendants were an employer, as that term is defined in

29 U.S.C. 2101(a)(1) and 20 C.F.R. 639(a), and continued to operate together as a business enterprise and decided to effect mass layoffs or plant closings at the Facilities. 56. For purposes of the WARN Act, EEF and FirstMed constitute a single

employer in that, among other things: (a) EFF was the majority shareholder of all the FirstMed entities through its corporate shell, Holdings;

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(b)

Through the Holdings board, EEF controlled Holdings and all the FirstMed entities;

(c)

FirstMed EMS was the name given to the enterprise that was used internally by executives to refer to the business. The titles on their business cards indicated they were executives of FirstMed EMS, with the trade names of the subsidiaries on the back. Specific corporate names of the subsidiary entities were not used in carrying on the business.

(d)

Among executives and managers, it was generally understood that the board of FirstMed was EEF, while FirstMed meant the operating company. Employees, who may have been aware of the existence of Holdings, did not distinguish it from FirstMed.

(e)

As of late-fall 2013, FirstMed was controlled by the board's two sole or majority members Andrew Paul, co-founder, Managing Director of EEF, and Samarth Chandra, Principal of EEF;

(f)

Upon information and belief, EEF appointed the chief officers who held those titles in all the operating FirstMed entities, including Brian Gibson, CEO and Shawn Hemming, CFO;

(g)

Samarth Chandra was the principal of EEF who directly engaged in managing FirstMeds financing and operation and visited FirstMed locations;

(h)

Upon information and belief, Samarth Chandra and Chris Martin brought in Nick Diliberto to be President of American Ambulette and Ambulance Service;

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(i)

Upon information and belief, Samarth Chandra attended FirstMed management meetings, including one in Tennessee in October, 2013;

(j)

Upon information and belief, in or around October, 2013, EEF placed Mike Fricke, a former CEO of one of its companies, in FirstMeds headquarters to work on FirstMeds revenue recognition among other tasks, which he continued to do for several weeks; and

(k)

Bryan Gibson spoke with FirstMed executives on December 6 and stated that because of a failure to come to terms with Bank of Montreal on a restructuring agreement, the board decided to file for chapter 7 and gave the directive to shut down.

57.

Upon information and belief, EEFs exercise of complete control over FirstMeds

financing, executive personnel, and other management functions, on which FirstMeds viability depended, directly affected the personnel policies and operations of FirstMed, left FirstMed no independence to pursue its own options to finance itself or survive. 58. Upon information and belief, EEF, the ultimate parent made the ultimate decision

to ditch its ambulance business causing its principals to direct the shutdown of FirstMed. 59. At all relevant times, Plaintiffs and the other similarly-situated former employees

were employees of Defendants as that term is defined by 29 U.S.C. 2101. 60. The mass layoff or plant closing at the Facilities resulted in employment losses,

as that term is defined by 29 U.S.C. 2101(a)(2) for at least fifty of Defendants employees as well as 33% of Defendants workforce at the Facilities, excluding part-time employees, as that term is defined by 29 U.S.C. 2l01(a)(8).

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61.

The Plaintiffs and the Class Members were terminated by Defendants without

cause on their part, as part of or as the reasonably foreseeable consequence of the mass layoffs or plant closings by Defendants at the Facilities. 62. The Plaintiffs and the Class Members are affected employees of the Defendants

within the meaning of 29 U.S.C. 210l(a)(5). 63. Defendants were required by the WARN Act to give the Plaintiffs and the Class

Members at least 60 days advance written notice of their terminations. 64. Defendants failed to give the Plaintiffs and the Class members written notice that

complied with the requirements of the WARN Act. 65. The Plaintiffs, and each of the Class Members, are aggrieved employees of th e

Defendants as that term is defined in 29 U.S.C. 2104 (a)(7). 66. Defendants failed to pay the Plaintiffs and each of the Class Members their

respective wages, salary, commissions, bonuses, accrued holiday pay, and accrued vacation for 60 days following their respective terminations and failed to make the pension and 401(k) contributions and provide employee benefits under ERISA, other than health insurance, for 60 days from and after the dates of their respective terminations. 67. Because the Plaintiffs and each of the Class Members seek backpay attributable to

a period of time after the filing of the Defendants bankruptcy petitions and which arose as the result of the Defendants violation of federal laws, Plaintiffs and the Class Members claims against Defendants are entitled to administrative expense claim against Defendants pursuant to 11 U.S.C. 503(b)(1)(A)(ii). SECOND CAUSE OF ACTION: UNPAID WAGES - NORTH CAROLINA

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68. paragraphs. 69.

Plaintiffs reallege and incorporate by reference all allegations in all proceeding

The Plaintiffs on behalf of similarly-situated employees who worked at or

reported to Defendants offices in North Carolina seek payment of all unpaid wages in violation of 95-25.22 the North Carolina Wage and Hour Act, plus interest at the legal rate from the date each amount first came due. 70. Pursuant to 95-25.22(a)(d), they seek liquidated damages equal to their unpaid

wages and reasonable attorneys fees. THIRD CAUSE OF ACTION: UNPAID WAGES - OHIO 71. paragraphs. 72. The Plaintiffs on behalf of similarly-situated employees who worked at or Plaintiffs reallege and incorporate by reference all allegations in all proceeding

reported to Defendants facilities in Ohio seek payment of all unpaid wages in violation of Ohio Revised Code Section 4113.15 (A), plus penalty interest at the 6% rate after 30 days from when they first came due. FOURTH CAUSE OF ACTION: UNPAID WAGES - VIRGINIA 73. paragraphs. 74. The Plaintiffs on behalf of similarly-situated employees who worked at or Plaintiffs reallege and incorporate by reference all allegations in all proceeding

reported to Defendants facilities in Virginia seek payment for all unpaid wages in violation of Virginia Payment of Wage Law, 40.1-29 of the Code of Virginia, plus penalties for each violation.

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75. violation.

Defendants withholding of wages was willful and subject to a $1,000 penalty per

FIFTH CAUSE OF ACTION: UNPAID WAGES WEST VIRGINIA 76. paragraphs. 77. The Plaintiffs on behalf of similarly-situated employees who worked at or Plaintiffs reallege and incorporate by reference all allegations in all proceeding

reported to Defendants facilities in West Virginia seek payment for all unpaid wages in violation of Art. 5, 21-5-3, and 21-5-5, of the Wage Payment and Collection law. 78. Because salary and wage payments were not paid when payment was due,

Plaintiffs seek treble liquidated damages and a lien and all other rights and remedies for the protection and enforcement of the unpaid salary or wages. SIXTH CAUSE OF ACTION: UNPAID WAGES SOUTH CAROLINA 79. paragraphs. 80. The Plaintiffs on behalf of similarly-situated employees who worked at or Plaintiffs reallege and incorporate by reference all allegations in all proceeding

reported to Defendants facilities in South Carolina seek payment for all unpaid wages in violation of the South Carolina Payment of Wages Act 41-10-40 and -50. 81. Defendants failure to pay wages violated 41-10-80, entitling the Plaintiffs to an

amount equal to three times the full amount of their unpaid wages, plus costs and reasonable attorneys fees as the court may allow. SEVENTH CAUSE OF ACTION: UNPAID WAGES KENTUCKY 82. paragraphs. Plaintiffs reallege and incorporate by reference all allegations in all proceeding

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83.

The Plaintiffs on behalf of similarly-situated employees who worked at or

reported to Defendants facilities in seek payment for all unpaid wages as required by the Kentucky Payment of Wages law 337.427. 84. Defendants nonpayment of wages was willful, requiring payment of an

additional equal amount as liquidated damages, and reasonable attorneys fees and costs under 337.427(2). PRAYER FOR RELIEF WHEREFORE, the Plaintiffs, individually and on behalf of all other similarly-situated persons, pray for the following relief as against Defendants: A. B. C. D. Certification of this action as a class action; Designation of the Plaintiffs as Class Representatives; Appointment of the undersigned attorneys as Class Counsel; A first priority administrative expense claim against Defendants pursuant to 11 U.S.C. 503(b)(1)(A) in favor of the Plaintiffs and the other similarly-situated former employees equal to the sum of: their unpaid wages, salary, commissions, bonuses, accrued holiday pay, accrued vacation pay, pension and 401(k) contributions and other COBRA benefits, for 60 days, that would have been covered and paid under the then-applicable employee benefit plans had that coverage continued for that period, all determined in accordance with the WARN Act, 29 U.S.C. 2104 (a)(1)(A); or, alternatively, determining that the first $12,475 of the WARN Act claims of the Plaintiffs and each of the other similarlysituated former employees are entitled to priority status, under 11 U.S.C. 507(a)(4)-(5), and the remainder is a general unsecured claim;

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E.

A priority wage claim against the Debtors pursuant to 11 U.S.C. 507(a)(4) in favor of the Plaintiffs and the other similarly-situated former employees for payment of accrued vacation time, interest, applicable liquidated damages, and attorneys fees and costs pursuant to the North Carolina Wage and Hour Act 9525.22; Ohio Revised Code 4113.15 (A); Virginia Payment of Wage Law 40.129; West Virginia Wage Payment and Collection Law Art. 5, 21-5-3, 21-5-5; South Carolina Payment of Wages Act 41-10-40; and Kentucky Payment of Wages law 337.427; and for any unpaid benefits amounts due under 11 U.S.C. 507(a)(5); and

F.

Such other and further relief as this Court may deem just and proper.

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December 16, 2013 Respectfully submitted,

By:

/s/ Oliver Carter III Oliver Carter III, NC State Bar No. 36161 Carter & Carter, P.A. 408 Market Street; Wilmington, NC 28401 Telephone: 910.763.3626 Facsimile: 866.249.7856 oliver@carterandcarterlaw.com Local Rule 83.1 Attorneys for Plaintiffs

By:

/s/ Jack A. Raisner Jack A. Raisner NY State Bar No. JR6171 Ren S. Roupinian NY State Bar No. RR3884 OUTTEN & GOLDEN LLP 3 Park Avenue, 29th Floor New York, New York 10016 jar@outtengolden.com rsr@outtengolden.com Telephone: (212) 245-1000 Facsimile: (212)977-4005 Attorneys for the Plaintiffs and the Putative Class

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