New Century workers in court

New Century Financial Corp.’s employees asked a bankruptcy judge for permission to band together to attempt to collect $40 million they claim the sub-prime mortgage lender owed workers.

The employees of the collapsed Irvine lender asked U.S. Bankruptcy Court Judge Kevin J. Carey in Wilmington, Del., to order the creation of a committee to represent at least 570 current and former workers who contributed money to a New Century deferred compensation plan and an executive retirement plan. Under bankruptcy rules, if the employees get approval for their own court-sanctioned committee, their attorneys would be paid by New Century.

Most of the workers’ claims are not big enough “to justify incurring the personal time and expense or professional fees that would be required for any sort of meaningful participation in these cases,” attorneys for five of the employees said in a motion filed Wednesday.

When New Century filed for bankruptcy protection on April 2, it fired 3,200 employees, or more than half its workforce. The workers who filed the committee motion said they feared that other creditors would try to claim part of the $40 million contributed by employees to the two plans.

The motion was filed on behalf of five workers, who said the company owed them $60,000 to $876,000 each.

The company has about 2,800 employees left, spokesman Dan Gagnier said. He wouldn’t comment on the request for an employee committee.