cuts in wages and benefits, termination of defined 
benefit pension plans, and the transfer of productive 
assets to lower wage economies outside the United 
States. Retirees have suffered deep cutbacks in ben-
efits when companies in bankruptcy renege on their 
retiree health obligations and terminate pension 
plans. 
(2) Congress enacted chapter 11 of title 11, 
United States Code, to protect jobs and enhance en-
terprise value for all stakeholders and not to be used 
as a strategic weapon to eliminate good paying jobs, 
strip employees and their families of a lifetime’s 
worth of earned benefits and hinder their ability to 
participate in a prosperous and sustainable economy. 
Specific laws designed to treat workers and retirees 
fairly and keep companies operating are instead 
causing the burdens of bankruptcy to fall dispropor-
tionately and overwhelmingly on employees and re-
tirees, those least able to absorb the losses. 
(3) At the same time that working families and 
retirees are forced to make substantial economic sac-
rifices, executive pay enhancements continue to 
flourish in business bankruptcies, despite recent con-
gressional enactments designed to curb lavish pay 
packages for those in charge of failing enterprises. 
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Bankruptcy should not be a haven for the excesses 
of executive pay. 
(4) Employees and retirees, unlike other credi-
tors, have no way to diversify the risk of their em-
ployer’s bankruptcy. 
(5) Comprehensive reform is essential in order 
to remedy these fundamental inequities in the bank-
ruptcy process and to recognize the unique firm-spe-
cific investment by employees and retirees in their 
employers’ business through their labor. 
SEC. 3. INCREASED WAGE PRIORITY. 
Section 507(a) of title 11, United States Code, is 
amended— 
(1) in paragraph (4)— 
(A) by striking ‘‘$10,000’’ and inserting 
‘‘$20,000’’; 
(B) by striking ‘‘within 180 days’’; and 
(C) by striking ‘‘or the date of the ces-
sation of the debtor’s business, whichever oc-
curs first,’’; 
(2) in paragraph (5)(A), by striking— 
(A) ‘‘within 180 days’’; and 
(B) ‘‘or the date of the cessation of the 
debtor’s business, whichever occurs first’’; and 
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(3) in paragraph (5), by striking subparagraph 
(B) and inserting the following: 
‘‘(B) for each such plan, to the extent of 
the number of employees covered by each such 
plan, multiplied by $20,000.’’. 
SEC. 4. PRIORITY FOR STOCK VALUE LOSSES IN DEFINED 
CONTRIBUTION PLANS. 
(a) Section 101(5) of title 11, United States Code, 
is amended— 
(1) in subparagraph (A), by striking ‘‘or’’ at 
the end; 
(2) in subparagraph (B), by inserting ‘‘or’’ 
after the semicolon; and 
(3) by adding at the end the following: 
‘‘(C) right or interest in equity securities 
of the debtor, or an affiliate of the debtor, held 
in a defined contribution plan (within the mean-
ing of section 3(34) of the Employee Retire-
ment Income Security Act of 1974 (29 U.S.C. 
1002(34)) for the benefit of an individual who 
is not an insider or 1 of the 10 most highly 
compensated employees of the debtor (if 1 or 
more are not insiders), if such securities were 
attributable to— 
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‘‘(i) employer contributions by the 
debtor or an affiliate of the debtor, other 
than elective deferrals (within the meaning 
of section 402(g) of the Internal Revenue 
Code of 1986), and any earnings thereon; 
or 
‘‘(ii) elective deferrals and any earn-
ings thereon.’’. 
(b) Section 507(a) of title 11, United States Code, 
is amended— 
(1) by redesignating paragraphs (6) through 
(10) as paragraphs (7) through (11), respectively; 
(2) by inserting after paragraph (5) the fol-
lowing: 
‘‘(6) Sixth, loss of the value of equity securities 
of the debtor or affiliate of the debtor that are held 
in a defined contribution plan (within the meaning 
of section 3(34) of the Employee Retirement Income 
Security Act of 1974 (29 U.S.C. 1002(34)), without 
regard to when services resulting in the contribution 
of stock to the plan were rendered, measured by the 
market value of the stock at the time of contribution 
to, or purchase by, the plan and the value as of the 
commencement of the case where an employer or 
plan sponsor that has commenced a case under this 
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title has committed fraud with respect to such plan 
or has otherwise breached a duty to the participant 
that has proximately caused the loss of value.’’; 
(3) in paragraph (7), as redesignated, by strik-
ing ‘‘Sixth’’ and inserting ‘‘Seventh’’; 
(4) in paragraph (8), as redesignated, by strik-
ing ‘‘Seventh’’ and inserting ‘‘Eighth’’; 
(5) in paragraph (9), as redesignated, by strik-
ing ‘‘Eighth’’ and inserting ‘‘Ninth’’; 
(6) in paragraph (10), as redesignated, by 
striking ‘‘Ninth’’ and inserting ‘‘Tenth’’; and 
(7) in paragraph (11), as redesignated, by 
striking ‘‘Tenth’’ and inserting ‘‘Eleventh’’. 
SEC. 5. PRIORITY FOR SEVERANCE PAY. 
Section 503(b) of title 11, United States Code, is 
amended— 
(1) in paragraph (8) by striking ‘‘and’’ at the 
end; 
(2) in paragraph (9) by striking the period and 
inserting ‘‘; and’’; and 
(3) by adding at the end the following: 
‘‘(10) severance pay owed to employees of the 
debtor (other than to an insider, other senior man-
agement, or a consultant retained to provide services 
to the debtor), under a plan, program, or policy gen-
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erally applicable to employees of the debtor, or owed 
pursuant to a collective bargaining agreement, but 
not under an individual contract of employment, for 
termination or layoff on or after the date of the fil-
ing of the petition, which pay shall be deemed 
earned in full upon such layoff or termination of em-
ployment.’’. 
SEC. 6. EXECUTIVE COMPENSATION UPON EXIT FROM 
BANKRUPTCY. 
Section 1129(a)(5) of title 11, United States Code, 
is amended— 
(1) in subparagraph (A)(ii), by striking ‘‘and’’ 
at the end; and 
(2) in subparagraph (B), by striking the period 
at the end and inserting the following: ‘‘; and 
‘‘(C) the compensation disclosed pursuant 
to subparagraph (B) has been approved by, or 
is subject to the approval of, the court, as rea-
sonable when compared to persons holding com-
parable positions at comparable companies in 
the same industry and not disproportionate in 
light of economic concessions by the debtor’s 
nonmanagement workforce during the case.’’. 
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SEC. 7. LIMITATIONS ON EXECUTIVE COMPENSATION EN-
HANCEMENTS. 
Section 503(c) of title 11, United States Code, is 
amended— 
(1) in paragraph (1), by inserting ‘‘or for the 
payment of performance or incentive compensation, 
or a bonus of any kind, or other financial returns 
designed to replace or enhance incentive, stock, or 
other compensation in effect prior to the date of the 
commencement of the case,’’ after ‘‘remain with the 
debtor’s business,’’; and 
(2) by amending paragraph (3) to read as fol-
lows: 
‘‘(3) other transfers or obligations, to or for the 
benefit of officers, of managers, or of consultants re-
tained to provide services to the debtor, before or 
after the date of filing of the petition, in the absence 
of a finding by the court based upon evidence in the 
record, and without deference to the debtor’s request 
for such payments, that such transfers or obligations 
are essential to the survival of the debtor’s business 
or (in the case of a liquidation of some or all of the 
debtor’s assets) essential to the orderly liquidation 
and maximization of value of the assets of the debt-
or, in either case, because of the essential nature of 
the services provided, and then only to the extent 
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that the court finds such transfers or obligations are 
reasonable compared to individuals holding com-
parable positions at comparable companies in the 
same industry and not disproportionate in light of 
economic concessions by the debtor’s nonmanage-
ment workforce during the case.’’. 
SEC. 8. REJECTION OF COLLECTIVE BARGAINING AGREE-
MENTS. 
Section 1113 of title 11, United States Code, is 
amended— 
(1) by striking subsections (a) through (c) and 
inserting the following: 
‘‘(a) The debtor in possession, or the trustee if one 
has been appointed under this chapter, other than a trust-
ee in a case covered by subchapter IV of this chapter and 
by title I of the Railway Labor Act, may reject a collective 
bargaining agreement only in accordance with the provi-
sions of this section. 
‘‘(b)(1) Where a debtor in possession or trustee (here-
inafter in this section referred to collectively as a ‘trustee’) 
seeks rejection of a collective bargaining agreement, a mo-
tion seeking rejection shall not be filed unless the trustee 
has first met with the authorized representative (at rea-
sonable times and for a reasonable period in light of the 
complexity of the case) to confer in good faith in attempt-
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ing to reach mutually acceptable modifications of such 
agreement. Proposals by the trustee to modify the agree-
ment shall be limited to modifications to the agreement 
that— 
‘‘(A) are designed to achieve a total aggregate 
financial contribution for the affected labor group 
for a period not to exceed 2 years after the effective 
date of the plan; 
‘‘(B) shall be no more than the minimal savings 
necessary to permit the debtor to exit bankruptcy, 
such that confirmation of such plan is not likely to 
be followed by the liquidation of the debtor or any 
successor to the debtor; and 
‘‘(C) shall not overly burden the affected labor 
group, either in the amount of the savings sought 
from such group or the nature of the modifications, 
when compared to other constituent groups expected 
to maintain ongoing relationships with the debtor, 
including management personnel. 
‘‘(2) Proposals by the trustee under paragraph (1) 
shall be based upon the most complete and reliable infor-
mation available. Information that is relevant for the ne-
gotiations shall be provided to the authorized representa-
tive. 
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‘‘(c)(1) If, after a period of negotiations, the debtor 
and the authorized representative have not reached agree-
ment over mutually satisfactory modifications and the par-
ties are at an impasse, the debtor may file a motion seek-
ing rejection of the collective bargaining agreement after 
notice and a hearing held pursuant to subsection (d). The 
court may grant a motion to reject a collective bargaining 
agreement only if the court finds that— 
‘‘(A) the debtor has, prior to such hearing, 
complied with the requirements of subsection (b) 
and has conferred in good faith with the authorized 
representative regarding such proposed modifica-
tions, and the parties were at an impasse; 
‘‘(B) the court has considered alternative pro-
posals by the authorized representative and has de-
termined that such proposals do not meet the re-
quirements of subparagraphs (A) and (B) of sub-
section (b)(1); 
‘‘(C) further negotiations are not likely to 
produce a mutually satisfactory agreement; and 
‘‘(D) the court has considered— 
‘‘(i) the effect of the proposed financial re-
lief on the affected labor group; 
‘‘(ii) the ability of the debtor to retain an 
experienced and qualified workforce; and 
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‘‘(iii) the effect of a strike in the event of 
rejection of the collective bargaining agreement. 
‘‘(2) In reaching a decision under this subsection re-
garding whether modifications proposed by the debtor and 
the total aggregate savings meet the requirements of sub-
section (b), the court shall take into account— 
‘‘(A) the ongoing impact on the debtor of the 
debtor’s relationship with all subsidiaries and affili-
ates, regardless of whether any such subsidiary or 
affiliate is domestic or nondomestic, or whether any 
such subsidiary or affiliate is a debtor entity; and 
‘‘(B) whether the authorized representative 
agreed to provide financial relief to the debtor within 
the 24-month period prior to the date of the com-
mencement of the case, and if so, shall consider the 
total value of such relief in evaluating the debtor’s 
proposed modifications. 
‘‘(3) In reaching a decision under this subsection, 
where a debtor has implemented a program of incentive 
pay, bonuses, or other financial returns for insiders or sen-
ior management personnel during the bankruptcy, or has 
implemented such a program within 180 days before the 
date of the commencement of the case, the court shall pre-
sume that the debtor has failed to satisfy the requirements 
of subsection (b)(1)(C).’’; 
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(2) in subsection (d)— 
(A) by striking ‘‘(d)’’ and all that follows 
through paragraph (2) and inserting the fol-
lowing: 
‘‘(d)(1) Upon the filing of a motion for rejection of 
a collective bargaining agreement, the court shall schedule 
a hearing to be held on not less than 21 days notice (un-
less the debtor and the authorized representative agree to 
a shorter time). Only the debtor and the authorized rep-
resentative may appear and be heard at such hearing.’’; 
and 
(B) by redesignating paragraph (3) as 
paragraph (2); 
(3) in subsection (f), by adding at the end the 
following: ‘‘Any payment required to be made under 
this section before the date on which a plan con-
firmed under section 1129 is effective has the status 
of an allowed administrative expense, as provided in 
section 503.’’; and 
(4) by adding at the end the following: 
‘‘(g) The rejection of a collective bargaining agree-
ment constitutes a breach of such contract with the same 
effect as rejection of an executory contract pursuant to 
section 365(g). No claim for rejection damages shall be 
limited by section 502(b)(7). Economic self-help by an au-
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thorized representative shall be permitted upon a court 
order granting a motion to reject a collective bargaining 
agreement under subsection (c) or court-authorized in-
terim changes under subsection (e), and no provision of 
this title or of any other Federal or State law shall be 
construed to the contrary. 
‘‘(h) At any time after the date on which an order 
is entered authorizing rejection, or where an agreement 
providing mutually satisfactory modifications has been en-
tered into between the debtor and the authorized rep-
resentative, at any time after such agreement has been 
entered into, the authorized representative may apply to 
the court for an order seeking an increase in the level of 
wages or benefits, or relief from working conditions, based 
upon changed circumstances. The court shall grant the re-
quest so long as the increase or other relief is consistent 
with the standard set forth in subsection (b)(1)(B). 
‘‘(i) Upon request by the authorized representative, 
and where the court finds that the prospects for reaching 
a mutually satisfactory agreement would be aided by 
granting the request, the court may direct that a dispute 
under subsection (c) be heard and determined by a neutral 
panel of experienced labor arbitrators in lieu of a court 
proceeding under subsection (d). The decision of such 
panel shall have the same effect as a decision by the court. 
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The court’s decision directing the appointment of a neu-
tral panel is not subject to appeal. 
‘‘(j) Upon request by the authorized representative, 
the debtor shall provide for the reasonable fees and costs 
incurred by the authorized representative under this sec-
tion, after notice and a hearing. 
‘‘(k) If a plan to be confirmed under section 1129 
provides for the liquidation of the debtor, whether by sale 
or cessation of all or part of the business, the trustee and 
the authorized representative shall confer regarding the ef-
fects of such liquidation on the affected labor group, in 
accordance with applicable nonbankruptcy law, and shall 
provide for the payment of all accrued obligations not as-
sumed as part of a sale transaction, and for such other 
terms as may be agreed upon, in order to ensure an or-
derly transfer of assets or cessation of the business. Any 
such payments shall have the status of allowed administra-
tive expenses under section 503. 
‘‘(l) A collective bargaining agreement that is as-
sumed shall be assumed in accordance with section 365.’’. 
SEC. 9. PAYMENT OF INSURANCE BENEFITS TO RETIRED 
EMPLOYEES. 
Section 1114 of title 11, United States Code, is 
amended— 
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(1) in subsection (a), by inserting ‘‘, whether or 
not the debtor asserts a right to unilaterally modify 
such payments under such plan, fund, or program’’ 
before the period at the end; 
(2) in subsection (c)(1), by adding at the end 
the following: ‘‘Where a labor organization elects to 
serve as the authorized representative, the debtor 
shall provide for the reasonable fees and costs in-
curred by the authorized representative under this 
section after notice and a hearing.’’; 
(3) in subsection (f), by striking ‘‘(f)’’ and all 
that follows through paragraph (2) and inserting the 
following: 
‘‘(f)(1) Where a trustee seeks modification of retiree 
benefits, a motion seeking modification of such benefits 
shall not be filed, unless the trustee has first met with 
the authorized representative (at reasonable times and for 
a reasonable period in light of the complexity of the case) 
to confer in good faith in attempting to reach mutually 
satisfactory modifications. Proposals by the trustee to 
modify retiree benefits shall be limited to modifications in 
retiree benefits that— 
‘‘(A) are designed to achieve a total aggregate 
financial contribution for the affected retiree group 
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for a period not to exceed 2 years after the effective 
date of the plan; 
‘‘(B) shall be no more than the minimal savings 
necessary to permit the debtor to exit bankruptcy, 
such that confirmation of such plan is not likely to 
be followed by the liquidation of the debtor or any 
successor to the debtor; and 
‘‘(C) shall not overly burden the affected retir-
ees, either in the amount of the savings sought or 
the nature of the modifications, when compared to 
other constituent groups expected to maintain ongo-
ing relationships with the debtor, including manage-
ment personnel. 
‘‘(2) Proposals by the trustee under paragraph (1) 
shall be based upon the most complete and reliable infor-
mation available. Information that is relevant for the ne-
gotiations shall be provided to the authorized representa-
tive.’’; 
(4) in subsection (g), by striking ‘‘(g)’’ and all 
that follows through the semicolon at the end of 
paragraph (3) and inserting the following: 
‘‘(g) If, after a period of negotiations, the debtor and 
the authorized representative have not reached agreement 
over mutually satisfactory modifications and the parties 
are at an impasse, the debtor may apply to the court for 
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modifications in the payment of retiree benefits after no-
tice and a hearing held pursuant to subsection (k). The 
court may grant a motion to modify the payment of retiree 
benefits only if the court finds that— 
‘‘(1) the debtor has, prior to the hearing, com-
plied with the requirements of subsection (f) and has 
conferred in good faith with the authorized rep-
resentative regarding such proposed modifications 
and the parties were at an impasse; 
‘‘(2) the court has considered alternative pro-
posals by the authorized representative and has de-
termined that such proposals do not meet the re-
quirements of subparagraphs (A) and (B) of sub-
section (f)(1); 
‘‘(3) further negotiations are not likely to 
produce a mutually satisfactory agreement; and 
‘‘(4) the court has considered— 
‘‘(A) the effect of the proposed modifica-
tions on the affected retirees; and 
‘‘(B) where the authorized representative is 
a labor organization, the effect of a strike in 
the event of modification of retiree health bene-
fits;’’; 
(5) in subsection (k)— 
(A) in paragraph (1)— 
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ductions in the health benefits of active employees of the 
debtor on or after the commencement of the case or re-
duced or eliminated active or retiree benefits within 180 
days prior to the date of the commencement of the case.’’. 
SEC. 10. PROTECTION OF EMPLOYEE BENEFITS IN A SALE 
OF ASSETS. 
Section 363 of title 11, United States Code, is 
amended— 
(1) in subsection (b), by adding at the end the 
following: 
‘‘(3) In approving a sale under this subsection, the 
court shall consider the extent to which a bidder has of-
fered to maintain existing jobs, has preserved retiree 
health benefits, and has assumed the obligations of any 
defined benefit plan, in determining whether an offer con-
stitutes the highest or best offer for such property.’’; and 
(2) by adding at the end the following: 
‘‘(q) If, as a result of a sale approved under this sec-
tion, retiree benefits, as defined under section 1114(a), are 
modified or eliminated pursuant to the provisions of sub-
section (e)(1) or (h) of section 1114 or otherwise, then, 
except as otherwise provided in an agreement with the au-
thorized representative of such retirees, a charge of 
$20,000 per retiree shall be made against the proceeds 
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of such sale (or paid by the buyer as part of the sale) 
for the purpose of— 
‘‘(1) funding 12 months of health coverage fol-
lowing the termination or modification of such cov-
erage through a plan, fund, or program made avail-
able by the buyer, by the debtor, or by a third party; 
or 
‘‘(2) providing the means by which affected re-
tirees may obtain replacement coverage on their 
own, 
except that the selection of either paragraph (1) or (2) 
shall be upon the consent of the authorized representative, 
within the meaning of section 1114(b), if any. Any claim 
for modification or elimination of retiree benefits pursuant 
to section 1114(i) shall be offset by the amounts paid 
under this subsection.’’. 
SEC. 11. UNION PROOF OF CLAIM. 
Section 501(a) of title 11, United States Code, is 
amended by inserting ‘‘, including a labor organization,’’ 
after ‘‘A creditor’’. 
SEC. 12. CLAIM FOR LOSS OF PENSION BENEFITS. 
Section 502 of title 11, United States Code, is 
amended by adding at the end the following: 
‘‘(l) The court shall allow a claim asserted by an ac-
tive or retired participant in a defined benefit plan termi-
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nated under section 4041 or 4042 of the Employee Retire-
ment Income Security Act of 1974, for any shortfall in 
pension benefits accrued as of the effective date of the ter-
mination of such pension plan as a result of the termi-
nation of the plan and limitations upon the payment of 
benefits imposed pursuant to section 4022 of such Act, 
notwithstanding any claim asserted and collected by the 
Pension Benefit Guaranty Corporation with respect to 
such termination.’’. 
SEC. 13. PAYMENTS BY SECURED LENDER. 
Section 506(c) of title 11, United States Code, is 
amended by adding at the end the following: ‘‘Where em-
ployees have not received wages, accrued vacation, sever-
ance, or other benefits owed pursuant to the terms of a 
collective bargaining agreement for services rendered on 
and after the date of the commencement of the case, such 
unpaid obligations shall be deemed necessary costs and ex-
penses of preserving, or disposing of, property securing an 
allowed secured claim and shall be recovered even if the 
trustee has otherwise waived the provisions of this sub-
section under an agreement with the holder of the allowed 
secured claim or successor or predecessor in interest.’’. 
SEC. 14. PRESERVATION OF JOBS AND BENEFITS. 
Title 11, United States Code, is amended— 
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(1) by inserting before section 1101 the fol-
lowing: 
‘‘SEC. 1100. STATEMENT OF PURPOSE. 
‘‘A debtor commencing a case under this chapter 
shall have as its purpose the reorganization of its business 
and, to the greatest extent possible, maintaining or en-
hancing the productive use of its assets, so as to preserve 
jobs.’’; 
(2) in section 1129(a), by adding at the end the 
following: 
‘‘(17) The debtor has demonstrated that every 
reasonable effort has been made to maintain existing 
jobs and mitigate losses to employees and retirees.’’; 
(3) in section 1129(c), by striking the last sen-
tence and inserting the following: ‘‘If the require-
ments of subsections (a) and (b) are met with re-
spect to more than 1 plan, the court shall, in deter-
mining which plan to confirm, consider— 
‘‘(1) the extent to which each plan would main-
tain existing jobs, has preserved retiree health bene-
fits, and has maintained any existing defined benefit 
plans; and 
‘‘(2) the preferences of creditors and equity se-
curity holders, and shall confirm the plan that better 
serves the interests of employees and retirees.’’; and 
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(4) in the table of sections in chapter 11, by in-
serting the following before the item relating to sec-
tion 1101: 
‘‘1100. Statement of purpose.’’. 
SEC. 15. ASSUMPTION OF EXECUTIVE RETIREMENT PLANS. 
Section 365 of title 11, United States Code, is 
amended— 
(1) in subsection (a), by striking ‘‘and (d)’’ and 
inserting ‘‘(d), and (q)’’; and 
(2) by adding at the end the following: 
‘‘(q) No deferred compensation arrangement for the 
benefit of insiders or senior management of the debtor 
shall be assumed if a defined benefit plan for employees 
of the debtor has been terminated pursuant to section 
4041 or 4042 of the Employee Retirement Income Secu-
rity Act of 1974, on or after the date of the commence-
ment of the case or within 180 days prior to the date of 
the commencement of the case.’’. 
SEC. 16. RECOVERY OF EXECUTIVE COMPENSATION. 
Title 11, United States Code, is amended by inserting 
after section 562 the following: 
‘‘§ 563. Recovery of executive compensation 
‘‘(a) If a debtor has obtained relief under subsection 
(c) or (e) of section 1113, or subsection (g) or (h) of sec-
tion 1114, by which the debtor reduces its contractual ob-
ligations under a collective bargaining agreement or re-
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tiree benefits plan, the court, as part of the entry of such 
order granting relief, shall determine the percentage dimi-
nution, as a result of the relief granted under section 1113 
or 1114, in the value of the obligations when compared 
to the debtor’s obligations under the collective bargaining 
agreement or with respect to retiree benefits, as of the 
date of the commencement of the case under this title. 
In making its determination, the court shall include reduc-
tions in benefits, if any, as a result of the termination pur-
suant to section 4041 or 4042 of the Employee Retirement 
Income Security Act of 1974, of a defined benefit plan 
administered by the debtor, or for which the debtor is a 
contributing employer, effective at any time on or after 
180 days before the date of the commencement of a case 
under this title. The court shall not take into account pen-
sion benefits paid or payable under the provisions of title 
IV of such Act as a result of any such termination. 
‘‘(b) Where a defined benefit plan administered by 
the debtor, or for which the debtor is a contributing em-
ployer, has been terminated pursuant to section 4041 or 
4042 of the Employee Retirement Income Security Act of 
1974, effective at any time on or after 180 days before 
the date of the commencement of a case under this title, 
but a debtor has not obtained relief under subsection (c) 
or (e) of section 1113, or subsection (g) or (h) of section 
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1114 of this title, the court, upon motion of a party in 
interest, shall determine the percentage diminution in the 
value of benefit obligations when compared to the total 
benefit liabilities prior to such termination. The court shall 
not take into account pension benefits paid or payable 
under the provisions of title IV of the Employee Retire-
ment Income Security Act of 1974 as a result of any such 
termination. 
‘‘(c) Upon the determination of the percentage dimi-
nution in value under subsection (a) or (b), the estate shall 
have a claim for the return of the same percentage of the 
compensation paid, directly or indirectly (including any 
transfer to a self-settled trust or similar device, or to a 
nonqualified deferred compensation plan under section 
409A(d)(1) of the Internal Revenue Code of 1986) to any 
officer of the debtor serving as member of the board of 
directors of the debtor within the year before the date of 
the commencement of the case, and any individual serving 
as chairman and any individual serving as lead director 
of the board of directors at the time of the granting of 
relief under section 1113 or 1114 of this title or, if no 
such relief has been granted, the termination of the de-
fined benefit plan. 
‘‘(d) The trustee or a committee appointed pursuant 
to section 1102 may commence an action to recover such 
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claims, except that if neither the trustee nor such com-
mittee commences an action to recover such claim by the 
first date set for the hearing on the confirmation of plan 
under section 1129, any party in interest may apply to 
the court for authority to recover such claim for the ben-
efit of the estate. The costs of recovery shall be borne by 
the estate. 
‘‘(e) The court shall not award postpetition com-
pensation under section 503(c) or otherwise to any person 
subject to the provisions of subsection (c) if there is a rea-
sonable likelihood that such compensation is intended to 
reimburse or replace compensation recovered by the estate 
under this section.’’. 
SEC. 17. EXCEPTION FROM AUTOMATIC STAY. 
Section 362(b) of title 11, United States Code, is 
amended— 
(1) in paragraph (27), by striking ‘‘and’’ at the 
end; 
(2) in paragraph (28), by striking the period at 
the end and inserting ‘‘; and’’ and 
(3) by adding at the end the following: 
‘‘(29) of the commencement or continuation of 
a grievance, arbitration, or similar dispute resolution 
proceeding established by a collective bargaining 
agreement that was or could have been commenced 
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against the debtor before the filing of a case under 
this title, or the payment or enforcement of an 
award or settlement under such proceeding.’’. 
SEC. 18. PREFERENTIAL COMPENSATION TRANSFER. 
Section 547 of title 11, United States Code, is 
amended by adding at the end the following: 
‘‘(j) The trustee may avoid a transfer to or for the 
benefit of an insider (including an obligation incurred for 
the benefit of an insider under an employment contract) 
made in anticipation of bankruptcy, or a transfer made 
in anticipation of bankruptcy to a consultant who is for-
merly an insider and who is retained to provide services 
to an entity that becomes a debtor (including an obligation 
under a contract to provide services to such entity or to 
a debtor) made or incurred on or within 1 year before the 
filing of the petition. No provision of subsection (c) shall 
constitute a defense against the recovery of such transfer. 
The trustee or a committee appointed pursuant to section 
1102 may commence an action to recover such transfer, 
except that, if neither the trustee nor such committee com-
mences an action to recover such transfer by the time of 
the commencement of a hearing on the confirmation of 
a plan under section 1129, any party in interest may apply 
to the court for authority to recover the claims for the 
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benefit of the estate. The costs of recovery shall be borne 
by the estate.’’. 
SEC. 19. FINANCIAL RETURNS FOR EMPLOYEES AND RETIR-
EES. 
Section 1129(a) of title 11, United States Code, is 
amended— 
(1) by adding at the end the following: 
‘‘(18) In a case in which the debtor initiated 
proceedings under section 1113, the plan provides 
for recovery of rejection damages (where the debtor 
obtained relief under subsection (c) or (e) of section 
1113 prior to confirmation of the plan) or for other 
financial returns, as negotiated by the debtor and 
the authorized representative (to the extent that 
such returns are paid under, rather than outside of, 
a plan).’’; and 
(2) by striking paragraph (13) and inserting 
the following: 
‘‘(13) With respect to retiree benefits, as that 
term is defined in section 1114, the plan— 
‘‘(A) provides for the continuation after its 
effective date of payment of all retiree benefits 
at the level established pursuant to subsection 
(e)(1)(B) or (g) of section 1114 at any time 
prior to the date of confirmation of the plan, 
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for the duration of the period for which the 
debtor has obligated itself to provide such bene-
fits, or, if no modifications are made prior to 
confirmation of the plan, the continuation of all 
such retiree benefits maintained or established 
in whole or in part by the debtor prior to the 
date of the filing of the petition; and 
‘‘(B) provides for allowed claims for modi-
fication of retiree benefits or for other financial 
returns, as negotiated by the debtor and the au-
thorized representative, to the extent that such 
returns are paid under, rather than outside of, 
a plan).’’. 
Æ 
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