New England Motor Freight is seeking permission to continue health benefits for employees through April 13.

In a letter last week, Vincent Colistra, a senior managing director with Phoenix Management Services Inc., and chief restructuring officer for the company, gave an update on the proposed severance package detailed on Feb. 15.

Colistra said the proposed severance package consisted of the greater of two weeks’ salary, or the employee’s accrued and unused vacation and sick days, and to extend current medical benefits up to April 13, at no expense to the employee, following termination of their employment.

He said the company is “working diligently” to secure bankruptcy court approval of that proposal, and has requested that bankruptcy court hold a hearing on that motion at 10 a.m. Friday at the United States Bankruptcy Court for the District of New Jersey, 50 Walnut St., Newark, New Jersey.

Colistra said he appeared with attorneys before the bankruptcy court, seeking temporary authority to continue providing employee health benefits to laid-off employees as they await the hearing Friday.

“The bankruptcy judge noted (Feb. 20) that he understood the underlying justifications for the severance package and was sympathetic to my desire to do the right thing by the employees,” Colistra said.

Colistra said the judge authorized the company to pay health benefits to laid-off employees through Monday, “subject to the ability of certain creditors to object to the terms of the company’s overall global severance plans for union and non-union employees at the anticipated March 1 hearing.”

He added, “If the bankruptcy court grants final approval of the severance package, then employees’ health benefits will continue through April 13 under the terms of the severance package. If the bankruptcy court does not grant final approval of the severance package, however, then employees will have the option to elect health coverage under COBRA.”

Colistra added, “Please be advised that due to the anticipated March 1 hearing date, the first severance payments scheduled for Feb. 28 (for employees laid off on Feb. 15) must be postponed until after that hearing. If the company successfully obtains approval of the severance package on March 1, those payments will be processed as soon thereafter as possible, hopefully by Monday, March 4.”

“In sum, the company is doing all that it can to obtain final court approval for the employee severance package, and we are confident that we are moving in the right direction.”

New England Motor Freight employees were laid off earlier this month as part of the company’s bankruptcy filing and shutdown.

On behalf of hundreds of NEMF employees, Klehr Harrison Harvey Branzburg LLP filed a class-action lawsuit Feb. 14 in U.S. Bankruptcy Court in New Jersey claiming the company violated the federal Worker Adjustment and Retraining Notification Act.

The WARN Act requires companies to give employees 60 days notice of mass layoffs.

“The employees were not provided 60 days advance notice of their terminations,” lawyer Christopher Leavell wrote in the complaint.

NEMF filed Feb. 11 for Chapter 11 bankruptcy protection and announced plans to wind down its operations. The move surprised many of the company’s employees, who were out of work by the end of that week.

The company had 36 trucking terminals throughout the mid-Atlantic, Northeast and Midwest, including one in Lehighton.

Around 200 people were employed at the Lehighton terminal, located along Mahoning Drive East. NEMF employed a total of 3,450 people nationwide.

Mary Carlin and Dan Webster are listed as the main plaintiffs in the class-action lawsuit.

According to The Wall Street Journal, the company reported assets of $100 million to $500 million and debts between $50 million and $100 million and $59 million owed to four banks as the company’s largest unsecured creditors.

Last year NEMF ranked as the 17th-largest “less-than-truckload” carrier in the country with revenue over $400 million. According to the state Department of Labor and Industry, it was in the top 25 largest employers in Carbon County for 2018.

NEMF representatives have not returned a request for comment on the lawsuit.