The former CEO of bankrupt clothing giant Warnaco Group Inc, Linda Wachner, is demanding a $25.1 million severance settlement and wants her claim to be given priority over those of other unsecured creditors.

Lawyers acting for the ousted Wachner have told bankruptcy court judges she is owed the money as she contributed valuably to the company, is due outstanding expenses and also lost cash after investing heavily in Warnaco stock.

They also want the claim to be dealt with as an administrative expense which under bankruptcy law will see it given top priority. Warnaco and other creditors are fighting the claim saying it has no merit.

Warnaco sacked Wachner last November – five months after it filed for Chapter 11 bankruptcy protection - but did not give her any severance pay.