II 

118TH CONGRESS 

2D SESSION S. 5443 

To amend title 11, United States Code, to improve protections for employees 

and retirees in business bankruptcies. 

IN THE SENATE OF THE UNITED STATES 

DECEMBER 5, 2024 

Mr. DURBIN (for himself, Mr. HAWLEY, Mr. SCHATZ, Ms. HIRONO, Ms. 

DUCKWORTH, Mr. BROWN, Mr. MERKLEY, Ms. KLOBUCHAR, and Mr. 

WHITEHOUSE) introduced the following bill; which was read twice and referred to the Committee on the Judiciary 

A BILL 

To amend title 11, United States Code, to improve protections for employees and retirees in business bankruptcies. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

4 (a) SHORT TITLE.—This Act may be cited as the 

5 ‘‘Protecting Employees and Retirees in Business Bank6 ruptcies Act of 2024’’. 

7 (b) TABLE OF CONTENTS.—The table of contents of 

8 this Act is as follows: 

Sec. 1. Short title; table of contents. 

Sec. 2. Findings. 


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TITLE I—IMPROVING RECOVERIES FOR EMPLOYEES AND 

RETIREES 

Sec. 101. Increased wage priority. 

Sec. 102. Claim for stock value losses in defined contribution plans. 

Sec. 103. Priority for severance pay and contributions to employee benefit 

plans. 

Sec. 104. Financial returns for employees and retirees. 

Sec. 105. Priority for WARN Act damages. 

TITLE II—REDUCING EMPLOYEES’ AND RETIREES’ LOSSES 

Sec. 201. Rejection of collective bargaining agreements. 

Sec. 202. Payment of insurance benefits to retired employees. 

Sec. 203. Protection of employee benefits in a sale of assets. 

Sec. 204. Claim for pension losses. 

Sec. 205. Payments by secured lender. 

Sec. 206. Preservation of jobs and benefits. 

Sec. 207. Termination of exclusivity. 

Sec. 208. Claim for withdrawal liability. 

TITLE III—RESTRICTING EXECUTIVE COMPENSATION PROGRAMS 

Sec. 301. Executive compensation upon exit from bankruptcy. 

Sec. 302. Limitations on executive compensation enhancements. 

Sec. 303. Prohibition against special compensation payments. 

Sec. 304. Assumption of executive benefit plans. 

Sec. 305. Recovery of executive compensation. 

Sec. 306. Preferential compensation transfer. 

TITLE IV—OTHER PROVISIONS 

Sec. 401. Union proof of claim. 

Sec. 402. Exception from automatic stay. 

Sec. 403. Effect on collective bargaining agreements under the Railway Labor 

Act. 

1 SEC. 2. FINDINGS. 

2 The Congress finds the following: 

3 (1) Business bankruptcies have increased 

4 sharply in recent years and remain at high levels. 

5 These bankruptcies include several of the largest 

6 business bankruptcy filings in history. As the use of 

7 bankruptcy has expanded, job preservation and re8 tirement security are placed at greater risk. 


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1 (2) Laws enacted to improve recoveries for em2 ployees and retirees and limit their losses in bank3 ruptcy cases have not kept pace with the increasing 

4 and broader use of bankruptcy by businesses in all 

5 sectors of the economy. However, while protections 

6 for employees and retirees in bankruptcy cases have 

7 eroded, management compensation plans devised for 

8 those in charge of troubled businesses have become 

9 more prevalent and are escaping adequate scrutiny. 

10 (3) Changes in the law regarding these matters 

11 are urgently needed as bankruptcy is used to ad12 dress increasingly more complex and diverse condi13 tions affecting troubled businesses and industries. 

14 TITLE I—IMPROVING RECOV15 ERIES FOR EMPLOYEES AND 

16 RETIREES 

17 SEC. 101. INCREASED WAGE PRIORITY. 

18 Section 507(a) of title 11, United States Code, is 

19 amended— 

20 (1) in paragraph (4)— 

21 (A) by redesignating subparagraphs (A) 

22 and (B) as clauses (i) and (ii), respectively; 

23 (B) in the matter preceding clause (i), as 

24 so redesignated, by inserting ‘‘(A)’’ before 

25 ‘‘Fourth’’; 


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1 (C) in subparagraph (A), as so designated, 

2 in the matter preceding clause (i), as so redes3 ignated— 

4 (i) by striking ‘‘$10,000’’ and insert5 ing ‘‘$20,000’’; 

6 (ii) by striking ‘‘within 180 days’’; 

7 and 

8 (iii) by striking ‘‘or the date of the 

9 cessation of the debtor’s business, which10 ever occurs first,’’; and 

11 (D) by adding at the end the following: 

12 ‘‘(B) Severance pay described in subparagraph 

13 (A)(i) shall be deemed earned in full upon the layoff 

14 or termination of employment of the individual to 

15 whom the severance is owed.’’; and 

16 (2) in paragraph (5)— 

17 (A) in subparagraph (A)— 

18 (i) by striking ‘‘within 180 days’’; and 

19 (ii) by striking ‘‘or the date of the 

20 cessation of the debtor’s business, which21 ever occurs first’’; and 

22 (B) by striking subparagraph (B) and in23 serting the following: 


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1 ‘‘(B) for each such plan, to the extent of 

2 the number of employees covered by each such 

3 plan, multiplied by $20,000.’’. 

4 SEC. 102. CLAIM FOR STOCK VALUE LOSSES IN DEFINED 

5 CONTRIBUTION PLANS. 

6 Section 101(5) of title 11, United States Code, is 

7 amended— 

8 (1) in subparagraph (A), by striking ‘‘or’’ at 

9 the end; 

10 (2) in subparagraph (B), by striking the period 

11 at the end and inserting ‘‘; or’’; and 

12 (3) by adding at the end the following: 

13 ‘‘(C) right or interest in equity securities 

14 of the debtor, or an affiliate of the debtor, if— 

15 ‘‘(i) the equity securities are held in a 

16 defined contribution plan (within the 

17 meaning of section 3(34) of the Employee 

18 Retirement Income Security Act of 1974 

19 (29 U.S.C. 1002(34))) for the benefit of 

20 an individual who is not an insider, a sen21 ior executive officer, or any of the 20 high22 est compensated employees of the debtor 

23 who are not insiders or senior executive of24 ficers; 


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1 ‘‘(ii) the equity securities were attrib2 utable to either employer contributions by 

3 the debtor or an affiliate of the debtor, or 

4 elective deferrals (within the meaning of 

5 section 402(g) of the Internal Revenue 

6 Code of 1986), and any earnings thereon; 

7 and 

8 ‘‘(iii) an employer or plan sponsor 

9 who has commenced a case under this title 

10 has committed fraud with respect to such 

11 plan or has otherwise breached a duty to 

12 the participant that has proximately 

13 caused the loss of value.’’. 

14 SEC. 103. PRIORITY FOR SEVERANCE PAY AND CONTRIBU15 TIONS TO EMPLOYEE BENEFIT PLANS. 

16 Section 503(b) of title 11, United States Code, is 

17 amended— 

18 (1) in paragraph (8)(B), by striking ‘‘and’’ at 

19 the end; 

20 (2) in paragraph (9), by striking the period and 

21 inserting a semicolon; and 

22 (3) by adding at the end the following: 

23 ‘‘(10) severance pay owed to employees of the 

24 debtor (other than to an insider of the debtor, a sen25 ior executive officer of the debtor, the 20 highest 


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1 compensated employees of the debtor who are not in2 siders or senior executive officers, any department or 

3 division manager of the debtor, or any consultant 

4 providing services to the debtor), under a plan, pro5 gram, or policy generally applicable to employees of 

6 the debtor (but not under an individual contract of 

7 employment), or owed pursuant to a collective bar8 gaining agreement, for layoff or termination on or 

9 after the date of the filing of the petition, which pay 

10 shall be deemed earned in full upon such layoff or 

11 termination of employment; and 

12 ‘‘(11) any contribution to an employee benefit 

13 plan that is due on or after the date of the filing of 

14 the petition.’’. 

15 SEC. 104. FINANCIAL RETURNS FOR EMPLOYEES AND RE16 TIREES. 

17 Section 1129(a) of title 11, United States Code is 

18 amended— 

19 (1) by striking paragraph (13) and inserting 

20 the following: 

21 ‘‘(13) With respect to retiree benefits, as that 

22 term is defined in section 1114(a), the plan— 

23 ‘‘(A) provides for the continuation after 

24 the effective date of the plan of payment of all 

25 retiree benefits at the level established pursuant 


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1 to subsection (e)(1)(B) or (g) of section 1114 

2 at any time before the date of confirmation of 

3 the plan, for the duration of the period for 

4 which the debtor has obligated itself to provide 

5 such benefits, or if no modifications are made 

6 before confirmation of the plan, the continu7 ation of all such retiree benefits maintained or 

8 established in whole or in part by the debtor be9 fore the date of the filing of the petition; and 

10 ‘‘(B) provides for recovery of claims arising 

11 from the modification of retiree benefits or for 

12 other financial returns, as negotiated by the 

13 debtor and the authorized representative (to the 

14 extent that such returns are paid under, rather 

15 than outside of, a plan).’’; and 

16 (2) by adding at the end the following: 

17 ‘‘(17) The plan provides for recovery of dam18 ages payable for the rejection of a collective bar19 gaining agreement, or for other financial returns as 

20 negotiated by the debtor and the authorized rep21 resentative under section 1113 (to the extent that 

22 such returns are paid under, rather than outside of, 

23 a plan).’’. 


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1 SEC. 105. PRIORITY FOR WARN ACT DAMAGES. 

2 Section 503(b)(1)(A)(ii) of title 11, United States 

3 Code is amended by inserting ‘‘any back pay, civil penalty, 

4 or damages for a violation of any Federal or State labor 

5 and employment law, including the Worker Adjustment 

6 and Retraining Notification Act (29 U.S.C. 2101 et seq.) 

7 and any comparable State law, and’’ before ‘‘wages and 

8 benefits’’ each place that term appears. 

9 TITLE II—REDUCING EMPLOY10 EES’ AND RETIREES’ LOSSES 

11 SEC. 201. REJECTION OF COLLECTIVE BARGAINING AGREE12 MENTS. 

13 Section 1113 of title 11, United States Code, is 

14 amended by striking subsections (a) through (f) and in15 serting the following: 

16 ‘‘(a) The debtor in possession, or the trustee if one 

17 has been appointed under this chapter, other than as pro18 vided in section 103(m) for collective bargaining agree19 ments covered by the Railway Labor Act (45 U.S.C. 151 

20 et seq.), may reject a collective bargaining agreement only 

21 in accordance with this section. In this section, a reference 

22 to the trustee includes the debtor in possession. 

23 ‘‘(b) No provision of this title shall be construed to 

24 permit the trustee to unilaterally terminate or alter any 

25 provision of a collective bargaining agreement before com26 plying with this section. The trustee shall timely pay all 


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1 monetary obligations arising under the terms of the collec2 tive bargaining agreement. Any such payment required to 

3 be made before a plan confirmed under section 1129 is 

4 effective has the status of an allowed administrative ex5 pense under section 503. 

6 ‘‘(c)(1) If the trustee seeks modification of a collec7 tive bargaining agreement, the trustee shall provide notice 

8 to the labor organization representing the employees cov9 ered by the collective bargaining agreement that modifica10 tions are being proposed under this section, and shall 

11 promptly provide an initial proposal for modifications to 

12 the collective bargaining agreement. Thereafter, the trust13 ee shall confer in good faith with the labor organization, 

14 at reasonable times and for a reasonable period in light 

15 of the complexity of the case, in attempting to reach mutu16 ally acceptable modifications of the collective bargaining 

17 agreement. 

18 ‘‘(2) The initial proposal and subsequent proposals 

19 by the trustee for modification of a collective bargaining 

20 agreement shall be based upon a business plan for the re21 organization of the debtor, and shall reflect the most com22 plete and reliable information available. The trustee shall 

23 provide to the labor organization all information that is 

24 relevant for negotiations. The court may enter a protective 

25 order to prevent the disclosure of information if disclosure 


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1 could compromise the position of the debtor with respect 

2 to the competitors in the industry of the debtor, subject 

3 to the needs of the labor organization to evaluate the pro4 posals of the trustee and any application for rejection of 

5 the collective bargaining agreement or for interim relief 

6 pursuant to this section. 

7 ‘‘(3) In consideration of Federal policy encouraging 

8 the practice and process of collective bargaining and in 

9 recognition of the bargained-for expectations of the em10 ployees covered by the collective bargaining agreement, 

11 modifications proposed by the trustee— 

12 ‘‘(A) shall be proposed only as part of a pro13 gram of workforce and nonworkforce cost savings 

14 devised for the reorganization of the debtor, includ15 ing savings in management personnel costs; 

16 ‘‘(B) shall be limited to modifications designed 

17 to achieve a specified aggregate financial contribu18 tion for the employees covered by the collective bar19 gaining agreement (taking into consideration any 

20 labor cost savings negotiated within the 12-month 

21 period before the filing of the petition), and shall be 

22 not more than the minimum savings essential to per23 mit the debtor to exit bankruptcy, such that con24 firmation of a plan of reorganization is not likely to 

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1 ther financial reorganization, of the debtor (or any 

2 successor to the debtor) in the short term; and 

3 ‘‘(C) shall not be disproportionate or overly bur4 den the employees covered by the collective bar5 gaining agreement, either in the amount of the cost 

6 savings sought from such employees or the nature of 

7 the modifications. 

8 ‘‘(d)(1) If, after a period of negotiations, the trustee 

9 and the labor organization have not reached an agreement 

10 over mutually satisfactory modifications, and further ne11 gotiations are not likely to produce mutually satisfactory 

12 modifications, the trustee may file a motion seeking rejec13 tion of the collective bargaining agreement after notice 

14 and a hearing. Absent agreement of the parties, no such 

15 hearing shall be held before the expiration of the 21-day 

16 period beginning on the date on which notice of the hear17 ing is provided to the labor organization representing the 

18 employees covered by the collective bargaining agreement. 

19 Only the debtor and the labor organization may appear 

20 and be heard at such hearing. An application for rejection 

21 shall seek rejection effective upon the entry of an order 

22 granting the relief. 

23 ‘‘(2) In consideration of Federal policy encouraging 

24 the practice and process of collective bargaining and in 

25 recognition of the bargained-for expectations of the emVerDate Sep 11 2014 20:07 Dec 31, 2024 Jkt 059200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\S5443.IS S5443

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1 ployees covered by the collective bargaining agreement, the 

2 court may grant a motion seeking rejection of a collective 

3 bargaining agreement only if, based on clear and con4 vincing evidence— 

5 ‘‘(A) the court finds that the trustee has com6 plied with the requirements of subsection (c); 

7 ‘‘(B) the court has considered alternative pro8 posals by the labor organization and has concluded 

9 that such proposals do not meet the requirements of 

10 subsection (c)(3)(B); 

11 ‘‘(C) the court finds that further negotiations 

12 regarding the proposal of the trustee or an alter13 native proposal by the labor organization are not 

14 likely to produce an agreement; 

15 ‘‘(D) the court finds that implementation of the 

16 proposal of the trustee shall not— 

17 ‘‘(i) cause a material diminution in the 

18 purchasing power of the employees covered by 

19 the collective bargaining agreement; 

20 ‘‘(ii) adversely affect the ability of the 

21 debtor to retain an experienced and qualified 

22 workforce; or 

23 ‘‘(iii) impair the labor relations of the 

24 debtor such that the ability to achieve a feasible 

25 reorganization would be compromised; and 


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1 ‘‘(E) the court concludes that rejection of the 

2 collective bargaining agreement and immediate im3 plementation of the proposal of the trustee is essen4 tial to permit the debtor to exit bankruptcy, such 

5 that confirmation of a plan of reorganization is not 

6 likely to be followed by liquidation, or the need for 

7 further financial reorganization, of the debtor (or 

8 any successor to the debtor) in the short term. 

9 ‘‘(3) If, during the bankruptcy, the trustee has imple10 mented a program of incentive pay, bonuses, or other fi11 nancial returns for an insider of the debtor, a senior exec12 utive officer of the debtor, any of the 20 highest com13 pensated employees of the debtor who are not insiders or 

14 senior executive officers, any department or division man15 ager of the debtor, or any consultant providing services 

16 to the debtor, or such a program was implemented within 

17 180 days before the date of the filing of the petition, the 

18 court shall presume that the trustee has failed to satisfy 

19 the requirements of subsection (c)(3)(C). 

20 ‘‘(4) In no case shall the court enter an order reject21 ing a collective bargaining agreement that would result in 

22 modifications to a level lower than the level proposed by 

23 the trustee in the proposal found by the court to have com24 plied with the requirements of this section. 


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1 ‘‘(5) At any time after the date on which an order 

2 rejecting a collective bargaining agreement is entered, or 

3 in the case of a collective bargaining agreement entered 

4 into between the trustee and the labor organization pro5 viding mutually satisfactory modifications, at any time 

6 after that collective bargaining agreement has been en7 tered into, the labor organization may apply to the court 

8 for an order seeking an increase in the level of wages or 

9 benefits, or relief from working conditions, based upon 

10 changed circumstances. The court shall grant the request 

11 only if the increase or other relief is not inconsistent with 

12 the standard set forth in paragraph (2)(E). 

13 ‘‘(e) During a period during which a collective bar14 gaining agreement at issue under this section continues 

15 in effect and a motion for rejection of the collective bar16 gaining agreement has been filed, if essential to the con17 tinuation of the business of the debtor or in order to avoid 

18 irreparable damage to the estate, the court, after notice 

19 and a hearing, may authorize the trustee to implement 

20 interim changes in the terms, conditions, wages, benefits, 

21 or work rules provided by the collective bargaining agree22 ment. Any hearing under this subsection shall be sched23 uled in accordance with the needs of the trustee. The im24 plementation of such interim changes shall not render the 


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1 application for rejection moot and may be authorized for 

2 not more than 14 days in total. 

3 ‘‘(f)(1) Rejection of a collective bargaining agreement 

4 constitutes a breach of the collective bargaining agree5 ment, and shall be effective no earlier than the entry of 

6 an order granting such relief. 

7 ‘‘(2) Notwithstanding paragraph (1), solely for pur8 poses of determining and allowing a claim arising from 

9 the rejection of a collective bargaining agreement, rejec10 tion shall be treated as rejection of an executory contract 

11 under section 365(g) and shall be allowed or disallowed 

12 in accordance with section 502(g)(1). No claim for rejec13 tion damages shall be limited by section 502(b)(7). Eco14 nomic self-help by a labor organization shall be permitted 

15 upon a court order granting a motion to reject a collective 

16 bargaining agreement under subsection (d) or pursuant to 

17 subsection (e), and no provision of this title or of any other 

18 provision of Federal or State law may be construed to the 

19 contrary. 

20 ‘‘(g) The trustee shall provide for the reasonable fees 

21 and costs incurred by a labor organization under this sec22 tion, upon request and after notice and a hearing. 

23 ‘‘(h) A collective bargaining agreement that is as24 sumed shall be assumed in accordance with section 365.’’. 


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1 SEC. 202. PAYMENT OF INSURANCE BENEFITS TO RETIRED 

2 EMPLOYEES. 

3 Section 1114 of title 11, United States Code, is 

4 amended— 

5 (1) in subsection (a), by inserting ‘‘, without re6 gard to whether the debtor asserts a right to unilat7 erally modify such payments under such plan, fund, 

8 or program’’ before the period at the end; 

9 (2) in subsection (b)(2), by inserting ‘‘, and a 

10 labor organization serving as the authorized rep11 resentative under subsection (c)(1),’’ after ‘‘section’’; 

12 (3) by striking subsection (f) and inserting the 

13 following: 

14 ‘‘(f)(1) If a trustee seeks modification of retiree bene15 fits, the trustee shall provide a notice to the authorized 

16 representative that modifications are being proposed pur17 suant to this section, and shall promptly provide an initial 

18 proposal. Thereafter, the trustee shall confer in good faith 

19 with the authorized representative at reasonable times and 

20 for a reasonable period in light of the complexity of the 

21 case in attempting to reach mutually satisfactory modi22 fications. 

23 ‘‘(2) The initial proposal and subsequent proposals 

24 by the trustee shall be based upon a business plan for the 

25 reorganization of the debtor and shall reflect the most 

26 complete and reliable information available. The trustee 


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1 shall provide to the authorized representative all informa2 tion that is relevant for the negotiations. The court may 

3 enter a protective order to prevent the disclosure of infor4 mation if disclosure could compromise the position of the 

5 debtor with respect to the competitors in the industry of 

6 the debtor, subject to the needs of the authorized rep7 resentative to evaluate the proposals of the trustee and 

8 an application pursuant to subsection (g) or (h). 

9 ‘‘(3) Modifications proposed by the trustee— 

10 ‘‘(A) shall be proposed only as part of a pro11 gram of workforce and nonworkforce cost savings 

12 devised for the reorganization of the debtor, includ13 ing savings in management personnel costs; 

14 ‘‘(B) shall be limited to modifications that are 

15 designed to achieve a specified aggregate financial 

16 contribution for the retiree group represented by the 

17 authorized representative (taking into consideration 

18 any cost savings implemented within the 12-month 

19 period before the date of filing of the petition with 

20 respect to the retiree group), and shall be no more 

21 than the minimum savings essential to permit the 

22 debtor to exit bankruptcy, such that confirmation of 

23 a plan of reorganization is not likely to be followed 

24 by the liquidation, or the need for further financial 


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1 reorganization, of the debtor (or any successor to 

2 the debtor) in the short term; and 

3 ‘‘(C) shall not be disproportionate or overly bur4 den the retiree group, either in the amount of the 

5 cost savings sought from such group or the nature 

6 of the modifications.’’; 

7 (4) in subsection (g)— 

8 (A) by striking the subsection designation 

9 and all that follows through the semicolon at 

10 the end of paragraph (3) and inserting the fol11 lowing: 

12 ‘‘(g)(1) If, after a period of negotiations, the trustee 

13 and the authorized representative have not reached agree14 ment over mutually satisfactory modifications and further 

15 negotiations are not likely to produce mutually satisfac16 tory modifications, the trustee may file a motion seeking 

17 modifications in the payment of retiree benefits after no18 tice and a hearing. Absent agreement of the parties, no 

19 such hearing shall be held before the expiration of the 21- 

20 day period beginning on the date on which notice of the 

21 hearing is provided to the authorized representative. Only 

22 the debtor and the authorized representative may appear 

23 and be heard at such hearing. 


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1 ‘‘(2) The court may grant a motion to modify the 

2 payment of retiree benefits only if, based on clear and con3 vincing evidence— 

4 ‘‘(A) the court finds that the trustee has com5 plied with the requirements of subsection (f); 

6 ‘‘(B) the court has considered alternative pro7 posals by the authorized representative and has de8 termined that such proposals do not meet the re9 quirements of subsection (f)(3)(B); 

10 ‘‘(C) the court finds that further negotiations 

11 regarding the proposal of the trustee or an alter12 native proposal by the authorized representative are 

13 not likely to produce a mutually satisfactory agree14 ment; 

15 ‘‘(D) the court finds that implementation of the 

16 proposal shall not cause irreparable harm to the af17 fected retirees; and 

18 ‘‘(E) the court concludes that an order granting 

19 the motion and immediate implementation of the 

20 proposal of the trustee is essential to permit the 

21 debtor to exit bankruptcy, such that confirmation of 

22 a plan of reorganization is not likely to be followed 

23 by liquidation, or the need for further financial reor24 ganization, of the debtor (or a successor to the debt25 or) in the short term. 


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1 ‘‘(3) If, during the bankruptcy, a trustee has imple2 mented a program of incentive pay, bonuses, or other fi3 nancial returns for insiders of the debtor, senior executive 

4 officers of the debtor, the 20 highest compensated employ5 ees of the debtor who are not insiders or senior executive 

6 officers, any department or division managers of the debt7 or, or any consultants providing services to the debtor, or 

8 such a program was implemented within 180 days before 

9 the date of the filing of the petition, the court shall pre10 sume that the trustee has failed to satisfy the require11 ments of subsection (f)(3)(C).’’; and 

12 (B) in the matter following paragraph 

13 (3)— 

14 (i) by striking ‘‘except that in no 

15 case’’ and inserting the following: 

16 ‘‘(4) In no case’’; and 

17 (ii) by striking ‘‘is consistent with the 

18 standard set forth in paragraph (3)’’ and 

19 inserting ‘‘assures that all creditors, the 

20 debtor, and all of the affected parties are 

21 treated fairly and equitably, and is clearly 

22 favored by the balance of the equities’’; 

23 (5) in subsection (h)(1), by inserting ‘‘for a pe24 riod of not longer than 14 days’’ before the period; 

25 and 


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1 (6) by striking subsection (k) and redesignating 

2 subsections (l) and (m) as subsections (k) and (l), 

3 respectively. 

4 SEC. 203. PROTECTION OF EMPLOYEE BENEFITS IN A SALE 

5 OF ASSETS. 

6 (a) REQUIREMENT TO PRESERVE JOBS AND MAIN7 TAIN TERMS AND CONDITIONS OF EMPLOYMENT.—Sec8 tion 363 of title 11, United States Code, is amended by 

9 adding at the end the following: 

10 ‘‘(q)(1) In approving a sale or lease of property of 

11 the estate under this section or a plan under chapter 11, 

12 the court shall give substantial weight to the extent to 

13 which a prospective purchaser or lessee of the property 

14 will— 

15 ‘‘(A) preserve the jobs of the employees of the 

16 debtor; 

17 ‘‘(B) maintain the terms and conditions of em18 ployment of the employees of the debtor; and 

19 ‘‘(C) assume or match the pension and health 

20 benefit obligations of the debtor to the retirees of 

21 the debtor. 

22 ‘‘(2) If there are two or more offers to purchase or 

23 lease property of the estate under this section or a plan 

24 under chapter 11, the court shall approve the offer of the 

25 prospective purchaser or lessee that will best carry out the 


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1 actions described in subparagraphs (A) through (C) of 

2 paragraph (1).’’. 

3 (b) CHAPTER 11 PLANS.—Section 1129(a) of title 

4 11, United States Code is amended by adding at the end 

5 the following: 

6 ‘‘(17) If the plan provides for the sale of all or 

7 substantially all of the property of the estate, the 

8 plan requires the purchaser of the sale to carry out 

9 the actions described in subparagraphs (A) through 

10 (C) of section 363(q)(1).’’. 

11 SEC. 204. CLAIM FOR PENSION LOSSES. 

12 Section 502 of title 11, United States Code, is 

13 amended by adding at the end the following: 

14 ‘‘(l) The court shall allow a claim asserted by an ac15 tive or retired participant, or by a labor organization rep16 resenting such participants, in a defined benefit plan ter17 minated under section 4041 or 4042 of the Employee Re18 tirement Income Security Act of 1974 (29 U.S.C. 1341, 

19 1342), for any shortfall in pension benefits accrued as of 

20 the effective date of the termination of such pension plan 

21 as a result of the termination of the plan and limitations 

22 upon the payment of benefits imposed pursuant to section 

23 4022 of that Act (29 U.S.C. 1322), notwithstanding any 

24 claim asserted and collected by the Pension Benefit Guar25 anty Corporation with respect to such termination. 


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1 ‘‘(m) The court shall allow a claim of a kind described 

2 in section 101(5)(C) by an active or retired participant 

3 in a defined contribution plan (within the meaning of sec4 tion 3(34) of the Employee Retirement Income Security 

5 Act of 1974 (29 U.S.C. 1002(34))), or by a labor organi6 zation representing such participants. The amount of such 

7 claim shall be measured by the market value of the stock 

8 at the time of contribution to, or purchase by, the plan 

9 and the value as of the commencement of the case.’’. 

10 SEC. 205. PAYMENTS BY SECURED LENDER. 

11 Section 506(c) of title 11, United States Code, is 

12 amended— 

13 (1) by adding ‘‘(1)’’ after ‘‘(c)’’; and 

14 (2) by adding at the end the following: 

15 ‘‘(2) If one or more employees of the debtor have not 

16 received wages, accrued vacation, severance, or any other 

17 compensation owed under a plan, program, policy or prac18 tice of the debtor, or pursuant to the terms of a collective 

19 bargaining agreement, for services rendered on or after 

20 the date of the commencement of the case, or the debtor 

21 has not made a contribution due under an employee ben22 efit plan on or after the date of the commencement of the 

23 case, such unpaid obligations shall be deemed reasonable, 

24 necessary costs and expenses of preserving, or disposing 

25 of, property securing an allowed secured claim and benefitVerDate Sep 11 2014 20:07 Dec 31, 2024 Jkt 059200 PO 00000 Frm 00024 Fmt 6652 Sfmt 6201 E:\BILLS\S5443.IS S5443

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1 ting the holder of the allowed secured claim, and shall be 

2 recovered by the trustee for payment to the employees or 

3 the employee benefit plan, as applicable, even if the trust4 ee, or a successor or predecessor in interest has otherwise 

5 waived the provisions of this subsection under an agree6 ment with the holder of the allowed secured claim or a 

7 successor or predecessor in interest.’’. 

8 SEC. 206. PRESERVATION OF JOBS AND BENEFITS. 

9 Chapter 11 of title 11, United States Code, is amend10 ed— 

11 (1) by inserting before section 1101 the fol12 lowing: 

13 ‘‘§ 1100. Statement of purpose 

14 ‘‘A debtor commencing a case under this chapter 

15 shall have as its principal purpose the reorganization of 

16 its business to preserve going concern value to the max17 imum extent possible through the productive use of its as18 sets and the preservation of jobs that will sustain produc19 tive economic activity.’’; 

20 (2) in section 1129— 

21 (A) in subsection (a), as amended by sec22 tion 104 of this Act, by adding at the end the 

23 following: 

24 ‘‘(18) The debtor has demonstrated that the re25 organization preserves going concern value to the 


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1 maximum extent possible through the productive use 

2 of the assets of the debtor and preserves jobs that 

3 sustain productive economic activity.’’; and 

4 (B) in subsection (c)— 

5 (i) by inserting ‘‘(1)’’ after ‘‘(c)’’; and 

6 (ii) by striking the last sentence and 

7 inserting the following: 

8 ‘‘(2) If the requirements of subsections (a) and (b) 

9 are met with respect to more than 1 plan, the court shall, 

10 in determining which plan to confirm— 

11 ‘‘(A) consider the extent to which each plan 

12 would preserve going concern value through the pro13 ductive use of the assets of the debtor and the pres14 ervation of jobs that sustain productive economic ac15 tivity; and 

16 ‘‘(B) confirm the plan that better serves such 

17 interests. 

18 ‘‘(3) A plan that incorporates the terms of a settle19 ment with a labor organization representing employees of 

20 the debtor shall presumptively constitute the plan that sat21 isfies this subsection.’’; and 

22 (3) in the table of sections, by inserting before 

23 the item relating to section 1101 the following: 

‘‘1100. Statement of purpose.’’. 


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1 SEC. 207. TERMINATION OF EXCLUSIVITY. 

2 Section 1121(d) of title 11, United States Code, is 

3 amended by adding at the end the following: 

4 ‘‘(3) For purposes of this subsection, cause for reduc5 ing the 120-day period or the 180-day period includes— 

6 ‘‘(A) the filing of a motion pursuant to section 

7 1113 seeking rejection of a collective bargaining 

8 agreement if a plan based upon an alternative pro9 posal by the labor organization is reasonably likely 

10 to be confirmed within a reasonable time; and 

11 ‘‘(B) the proposed filing of a plan by a pro12 ponent other than the debtor, which incorporates the 

13 terms of a settlement with a labor organization if 

14 such plan is reasonably likely to be confirmed within 

15 a reasonable time.’’. 

16 SEC. 208. CLAIM FOR WITHDRAWAL LIABILITY. 

17 Section 503(b) of title 11, United States Code, as 

18 amended by section 103 of this Act, is amended by adding 

19 at the end the following: 

20 ‘‘(12) with respect to withdrawal liability owed 

21 to a multi-employer pension plan for a complete or 

22 partial withdrawal pursuant to section 4201 of the 

23 Employee Retirement Income Security Act of 1974 

24 (29 U.S.C. 1381) where such withdrawal occurs on 

25 or after the commencement of the case, an amount 

26 equal to the total benefits payable from such pension 


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1 plan that accrued as a result of employees’ services 

2 rendered to the debtor during the period beginning 

3 on the date of commencement of the case and end4 ing on the date of the withdrawal from the plan.’’. 

5 TITLE III—RESTRICTING EXECU6 TIVE COMPENSATION PRO7 GRAMS 

8 SEC. 301. EXECUTIVE COMPENSATION UPON EXIT FROM 

9 BANKRUPTCY. 

10 Section 1129(a) of title 11, United States Code, as 

11 amended by sections 104 and 206 of this Act, is amend12 ed— 

13 (1) in paragraph (4)— 

14 (A) by adding ‘‘(A)’’ after ‘‘(4)’’; 

15 (B) in subparagraph (A), as so designated, 

16 by striking ‘‘Any payment’’ and inserting ‘‘Sub17 ject to subparagraph (B), any payment’’; and 

18 (C) by adding at the end the following: 

19 ‘‘(B)(i) Subject to clause (ii), the plan does not 

20 provide for payments or other distributions to, or for 

21 the benefit of, an insider of the debtor, a senior ex22 ecutive officer of the debtor, any of the 20 highest 

23 compensated employees of the debtor who are not in24 siders or senior executive officers, any department or 


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1 division manager of the debtor, or any consultant 

2 providing services to the debtor, unless— 

3 ‘‘(I) the payments or other distributions 

4 are part of a program that is generally applica5 ble to all full-time employees of the debtor; and 

6 ‘‘(II) the payments or distributions do not 

7 exceed the compensation limits established in 

8 section 503(c)(1) in comparison to the non9 management workforce of the debtor. 

10 ‘‘(ii) The requirement under clause (i) shall not 

11 apply to the compensation described in paragraph 

12 (5)(C).’’; 

13 (2) in paragraph (5)— 

14 (A) in subparagraph (A)(ii), by striking 

15 ‘‘and’’ at the end; 

16 (B) in subparagraph (B), by striking the 

17 period at the end and inserting ‘‘; and’’; and 

18 (C) by adding at the end the following: 

19 ‘‘(C) the compensation disclosed under subpara20 graph (B) has been approved by, or is subject to the 

21 approval of, the court as— 

22 ‘‘(i) reasonable when compared to individ23 uals holding comparable positions at com24 parable companies in the same industry as the 

25 debtor; 


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1 ‘‘(ii) not more than the amount cor2 responding to the 50th percentile of the com3 pensation of the individuals described in clause 

4 (i); and 

5 ‘‘(iii) not excessive or disproportionate in 

6 light of economic losses of the nonmanagement 

7 workforce of the debtor.’’. 

8 SEC. 302. LIMITATIONS ON EXECUTIVE COMPENSATION EN9 HANCEMENTS. 

10 Section 503(c) of title 11, United States Code, is 

11 amended— 

12 (1) in the matter preceding paragraph (1), by 

13 inserting ‘‘and subject to section 363(b)(3)’’ after 

14 ‘‘subsection (b)’’; 

15 (2) in paragraph (1)— 

16 (A) in the matter preceding subparagraph 

17 (A)— 

18 (i) by inserting ‘‘, a senior executive 

19 officer of the debtor, any the 20 highest 

20 compensated employees of the debtor who 

21 are not insiders or senior executive officers, 

22 any department or division manager of the 

23 debtor, or any consultant providing serv24 ices to the debtor’’ before ‘‘for the pur25 pose’’; and 


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1 (ii) by inserting ‘‘or for the payment 

2 of performance or incentive compensation, 

3 or a bonus of any kind, or other financial 

4 returns designed to replace or enhance in5 centive, stock, or other compensation in ef6 fect before the date of the commencement 

7 of the case,’’ after ‘‘remain with the debt8 or’s business,’’; 

9 (B) by amending subparagraph (A) to read 

10 as follows: 

11 ‘‘(A) the transfer or obligation is part of a 

12 program that is generally applicable to all full13 time employees of the debtor; and’’; 

14 (C) by striking subparagraph (B); 

15 (D) by redesignating subparagraph (C) as 

16 subparagraph (B); 

17 (E) in subparagraph (B), as so redesig18 nated— 

19 (i) in clause (i), by striking ‘‘10’’ and 

20 inserting ‘‘2’’; and 

21 (ii) in clause (ii)— 

22 (I) by striking ‘‘25’’ and insert23 ing ‘‘10’’; and 

24 (II) by striking ‘‘insider’’ and in25 serting ‘‘person’’; 


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1 (3) in paragraph (2)— 

2 (A) in the matter preceding subparagraph 

3 (A), by inserting ‘‘, a senior executive officer of 

4 the debtor, any of the 20 highest compensated 

5 employees of the debtor who are not insiders or 

6 senior executive officers, any department or di7 vision manager of the debtor, or any consultant 

8 providing services to the debtor,’’ before ‘‘, un9 less’’; and 

10 (B) in subparagraph (B), by striking ‘‘10’’ 

11 and inserting ‘‘2’’; and 

12 (4) by amending paragraph (3) to read as fol13 lows: 

14 ‘‘(3) other transfers or obligations to, or for the 

15 benefit of, an insider of the debtor, a senior execu16 tive officer of the debtor, the 20 highest com17 pensated employees of the debtor who are not insid18 ers or senior executive officers, any department or 

19 division manager of the debtor, or any consultant 

20 providing services to the debtor that are outside of 

21 the ordinary course of business, except as part of a 

22 plan of reorganization and subject to the approval of 

23 the court under paragraphs (4) and (5) of section 

24 1129(a).’’. 


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1 SEC. 303. PROHIBITION AGAINST SPECIAL COMPENSATION 

2 PAYMENTS. 

3 Section 363 of title 11, United States Code, as 

4 amended by section 203 of this Act, is amended— 

5 (1) in subsection (b), by adding at the end the 

6 following: 

7 ‘‘(3) No plan, program, or other transfer or obliga8 tion to, or for the benefit of, an insider of the debtor, a 

9 senior executive officer of the debtor, the 20 highest com10 pensated employees of the debtor who are not insiders or 

11 senior executive officers, any department or division man12 ager of the debtor, or any consultant providing services 

13 to the debtor shall be approved if the debtor has, on or 

14 after the date that is 1 year before the date of the filing 

15 of the petition— 

16 ‘‘(A) discontinued any plan, program, policy, or 

17 practice of paying severance pay to the nonmanage18 ment workforce of the debtor; or 

19 ‘‘(B) modified any plan, program, policy, or 

20 practice described in subparagraph (A) in order to 

21 reduce benefits under the plan, program, policy, or 

22 practice.’’; and 

23 (2) in subsection (c)— 

24 (A) in paragraph (1), by striking ‘‘If the 

25 business’’ and inserting ‘‘Except as provided in 

26 paragraph (5), if the business’’; and 


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1 (B) by adding at the end the following: 

2 ‘‘(5) In the case of a transaction that is a transfer 

3 or obligation described in paragraphs (1) through (3) of 

4 section 503(c), the trustee shall obtain the prior approval 

5 of the court after notice and an opportunity for a hear6 ing.’’. 

7 SEC. 304. ASSUMPTION OF EXECUTIVE BENEFIT PLANS. 

8 Section 365 of title 11, United States Code, is 

9 amended— 

10 (1) in subsection (a), by striking ‘‘and (d)’’ and 

11 inserting ‘‘(d), (q), and (r)’’; and 

12 (2) by adding at the end the following: 

13 ‘‘(q) No deferred compensation arrangement for the 

14 benefit of an insider of the debtor, a senior executive offi15 cer of the debtor, or any of the 20 highest compensated 

16 employees of the debtor who are not insiders or senior ex17 ecutive officers shall be assumed if a defined benefit plan 

18 for employees of the debtor has been terminated pursuant 

19 to section 4041 or 4042 of the Employee Retirement In20 come Security Act of 1974 (29 U.S.C. 1341, 1342), on 

21 or after the date that is 1 year before the date of the com22 mencement of the case. 

23 ‘‘(r) No plan, fund, program, or contract to provide 

24 retiree benefits for insiders of the debtor, senior executive 

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1 ployees of the debtor who are not insiders or senior execu2 tive officers shall be assumed if the debtor has obtained 

3 relief under subsection (g) or (h) of section 1114 to impose 

4 reductions in retiree benefits or under subsection (d) or 

5 (e) of section 1113 to impose reductions in the health ben6 efits of active employees of the debtor, or has otherwise 

7 reduced or eliminated health benefits for employees or re8 tirees of the debtor on are after the date that is 1 year 

9 before the date of the commencement of the case.’’. 

10 SEC. 305. RECOVERY OF EXECUTIVE COMPENSATION. 

11 (a) IN GENERAL.—Subchapter III of chapter 5 of 

12 title 11, United States Code, is amended by inserting after 

13 section 562 the following: 

14 ‘‘§ 563. Recovery of executive compensation 

15 ‘‘(a) If a debtor has obtained relief under section 

16 1113(d) or section 1114(g), by which the debtor reduces 

17 the cost of its obligations under a collective bargaining 

18 agreement or a plan, fund, or program for retiree benefits 

19 (as defined in section 1114(a)), the court, in granting re20 lief, shall determine the percentage diminution in the value 

21 of the obligations when compared to the obligations of the 

22 debtor under the collective bargaining agreement, or with 

23 respect to retiree benefits, as of the date of the commence24 ment of the case under this title before granting such re25 lief. In making its determination, the court shall include 


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1 reductions in benefits, if any, as a result of the termi2 nation pursuant to section 4041 or 4042 of the Employee 

3 Retirement Income Security Act of 1974 (29 U.S.C. 1341, 

4 1342), of a defined benefit plan administered by the debt5 or, or for which the debtor is a contributing employer, ef6 fective at any time on or after 180 days before the date 

7 of the commencement of a case under this title. The court 

8 shall not take into account pension benefits paid or pay9 able under that Act as a result of any such termination. 

10 ‘‘(b) If a defined benefit pension plan administered 

11 by the debtor, or for which the debtor is a contributing 

12 employer, has been terminated pursuant to section 4041 

13 or 4042 of the Employee Retirement Income Security Act 

14 of 1974 (29 U.S.C. 1341, 1342), effective at any time on 

15 or after 180 days before the date of the commencement 

16 of a case under this title, but a debtor has not obtained 

17 relief under section 1113(d), or section 1114(g), the court, 

18 upon motion of a party in interest, shall determine the 

19 percentage diminution in the value of benefit obligations 

20 when compared to the total benefit liabilities before such 

21 termination. The court shall not take into account pension 

22 benefits paid or payable under title IV of the Employee 

23 Retirement Income Security Act of 1974 (29 U.S.C. 1301 

24 et seq.) as a result of any such termination. 


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1 ‘‘(c) Upon the determination of the percentage dimi2 nution in value under subsection (a) or (b), the estate shall 

3 have a claim for the return of the same percentage of the 

4 compensation paid, directly or indirectly (including any 

5 transfer to a self-settled trust or similar device, or to a 

6 nonqualified deferred compensation plan under section 

7 409A(d)(1) of the Internal Revenue Code of 1986) to any 

8 officer of the debtor serving as member of the board of 

9 directors of the debtor within the year before the date of 

10 the commencement of the case, and any individual serving 

11 as chairman or lead director of the board of directors at 

12 the time of the granting of relief under section 1113 or 

13 1114 or, if no such relief has been granted, the termi14 nation of the defined benefit plan. 

15 ‘‘(d) The trustee or a committee appointed pursuant 

16 to section 1102 may commence an action to recover such 

17 claims, except that if neither the trustee nor such com18 mittee commences an action to recover such claim by the 

19 first date set for the hearing on the confirmation of plan 

20 under section 1129, any party in interest may apply to 

21 the court for authority to recover such claim for the ben22 efit of the estate. The costs of recovery shall be borne by 

23 the estate. 

24 ‘‘(e) The court shall not award postpetition com25 pensation under section 503(c) or otherwise to any person 


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1 subject to subsection (c) of this section if there is a reason2 able likelihood that such compensation is intended to reim3 burse or replace compensation recovered by the estate 

4 under this section.’’. 

5 (b) TECHNICAL AND CONFORMING AMENDMENT.— 

6 The table of sections for chapter 5 of title 11, United 

7 States Code, is amended by inserting after the item relat8 ing to section 562 the following: 

‘‘563. Recovery of executive compensation.’’. 

9 SEC. 306. PREFERENTIAL COMPENSATION TRANSFER. 

10 Section 547 of title 11, United States Code, is 

11 amended by adding at the end the following: 

12 ‘‘(j)(1) The trustee may avoid a transfer— 

13 ‘‘(A) made— 

14 ‘‘(i) to, or for the benefit of, an insider of 

15 the debtor (including an obligation incurred for 

16 the benefit of an insider under an employment 

17 contract), a senior executive officer of the debt18 or, the 20 highest compensated employees of 

19 the debtor who are not insiders or senior execu20 tive officers, any department or division man21 ager of the debtor, or any consultant providing 

22 services to the debtor made in anticipation of 

23 bankruptcy; or 

24 ‘‘(ii) in anticipation of bankruptcy to a 

25 consultant who is formerly an insider and who 


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1 is retained to provide services to an entity that 

2 becomes a debtor (including an obligation under 

3 a contract to provide services to such entity or 

4 to a debtor); and 

5 ‘‘(B) made or incurred on or within 1 year be6 fore the filing of the petition. 

7 ‘‘(2) No provision of subsection (c) shall constitute 

8 a defense against the recovery of a transfer described in 

9 paragraph (1). 

10 ‘‘(3) The trustee or a committee appointed pursuant 

11 to section 1102 may commence an action to recover a 

12 transfer described in paragraph (1), except that, if neither 

13 the trustee nor such committee commences an action to 

14 recover the transfer by the time of the commencement of 

15 a hearing on the confirmation of a plan under section 

16 1129, any party in interest may apply to the court for 

17 authority to recover the claims for the benefit of the es18 tate. The costs of recovery shall be borne by the estate.’’. 

19 TITLE IV—OTHER PROVISIONS 

20 SEC. 401. UNION PROOF OF CLAIM. 

21 Section 501(a) of title 11, United States Code, is 

22 amended by inserting ‘‘, including a labor organization,’’ 

23 after ‘‘A creditor’’. 


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1 SEC. 402. EXCEPTION FROM AUTOMATIC STAY. 

2 Section 362(b) of title 11, United States Code, is 

3 amended— 

4 (1) in paragraph (28), by striking ‘‘and’’ at the 

5 end; 

6 (2) in paragraph (29), by striking the period at 

7 the end and inserting ‘‘; and’’; and 

8 (3) by inserting after paragraph (29) the fol9 lowing: 

10 ‘‘(30) of the commencement or continuation of 

11 a grievance, arbitration, or similar dispute resolution 

12 proceeding established by a collective bargaining 

13 agreement that was or could have been commenced 

14 against the debtor before the filing of a case under 

15 this title, or the payment or enforcement of an 

16 award or settlement under such proceeding.’’. 

17 SEC. 403. EFFECT ON COLLECTIVE BARGAINING AGREE18 MENTS UNDER THE RAILWAY LABOR ACT. 

19 Section 103 of title 11, United States Code, is 

20 amended by adding at the end the following: 

21 ‘‘(m) Notwithstanding sections 365, 1113, or 1114, 

22 neither the court nor the trustee may change the wages, 

23 working conditions, or retirement benefits of an employee 

24 or a retiree of the debtor established by a collective bar25 gaining agreement that is subject to the Railway Labor 


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1 Act (45 U.S.C. 151 et seq.), except in accordance with 

2 section 6 of that Act (45 U.S.C. 156).’’. 

Æ 


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