I 
115TH CONGRESS 
1ST SESSION 
H. R. 138 
To amend title 11, United States Code, to improve protections for employees 
and retirees in business bankruptcies. 
IN THE HOUSE OF REPRESENTATIVES 
JANUARY 3, 2017 
Mr. CONYERS (for himself, Mr. COHEN, Mr. JOHNSON of Georgia, Mr. 
DEUTCH, and Ms. JACKSON LEE) introduced the following bill; which was 
referred to the Committee on the Judiciary 
A BILL 
To amend title 11, United States Code, to improve protec-
tions for employees and retirees in business bankruptcies. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Protecting Employees and Retirees in Business Bank-
ruptcies Act of 2017’’. 
(b) TABLE OF CONTENTS.—The table of contents of 
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. 
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. 
TITLE III—RESTRICTING EXECUTIVE COMPENSATION PROGRAMS 
Sec. 301. Executive compensation upon exit from bankruptcy. 
Sec. 302. Limitations on executive compensation enhancements. 
Sec. 303. Assumption of executive benefit plans. 
Sec. 304. Recovery of executive compensation. 
Sec. 305. Preferential compensation transfer. 
TITLE IV—OTHER PROVISIONS 
Sec. 401. Union proof of claim. 
Sec. 402. Exception from automatic stay. 
SEC. 2. FINDINGS. 
The Congress finds the following: 
(1) Business bankruptcies have increased 
sharply in recent years and remain at high levels. 
These bankruptcies include several of the largest 
business bankruptcy filings in history. As the use of 
bankruptcy has expanded, job preservation and re-
tirement security are placed at greater risk. 
(2) Laws enacted to improve recoveries for em-
ployees and retirees and limit their losses in bank-
ruptcy cases have not kept pace with the increasing 
and broader use of bankruptcy by businesses in all 
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sectors of the economy. However, while protections 
for employees and retirees in bankruptcy cases have 
eroded, management compensation plans devised for 
those in charge of troubled businesses have become 
more prevalent and are escaping adequate scrutiny. 
(3) Changes in the law regarding these matters 
are urgently needed as bankruptcy is used to ad-
dress increasingly more complex and diverse condi-
tions affecting troubled businesses and industries. 
TITLE 
I—IMPROVING 
RECOV-
ERIES FOR EMPLOYEES AND 
RETIREES 
SEC. 101. 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 
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(B) ‘‘or the date of the cessation of the 
debtor’s business, whichever occurs first’’; and 
(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. 102. CLAIM FOR STOCK VALUE LOSSES IN DEFINED 
CONTRIBUTION PLANS. 
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, a senior executive officer, or 
any of the 20 next most highly compensated 
employees of the debtor (if one or more are not 
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insiders), if such securities were attributable to 
either employer contributions by the debtor or 
an affiliate of the debtor, or elective deferrals 
(within the meaning of section 402(g) of the In-
ternal Revenue Code of 1986), and any earn-
ings thereon, if an employer or plan sponsor 
who has commenced a case under this title has 
committed fraud with respect to such plan or 
has otherwise breached a duty to the partici-
pant that has proximately caused the loss of 
value.’’. 
SEC. 103. 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-
erally applicable to employees of the debtor (but not 
under an individual contract of employment), or 
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owed pursuant to a collective bargaining agreement, 
for layoff or termination on or after the date of the 
filing of the petition, which pay shall be deemed 
earned in full upon such layoff or termination of em-
ployment.’’. 
SEC. 104. FINANCIAL RETURNS FOR EMPLOYEES AND RE-
TIREES. 
Section 1129(a) of title 11, United States Code is 
amended— 
(1) by adding at the end the following: 
‘‘(17) The plan provides for recovery of dam-
ages payable for the rejection of a collective bar-
gaining agreement, or for other financial returns as 
negotiated by the debtor and the authorized rep-
resentative under section 1113 (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(a), 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 be-
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fore the date of confirmation of the plan, for 
the duration of the period for which the debtor 
has obligated itself to provide such benefits, or 
if no modifications are made before confirma-
tion of the plan, the continuation of all such re-
tiree benefits maintained or established in whole 
or in part by the debtor before the date of the 
filing of the petition; and 
‘‘(B) provides for recovery of claims arising 
from the modification of retiree benefits 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).’’. 
SEC. 105. PRIORITY FOR WARN ACT DAMAGES. 
Section 503(b)(1)(A)(ii) of title 11, United States 
Code is amended to read as follows: 
‘‘(ii) wages and benefits awarded pur-
suant to a judicial proceeding or a pro-
ceeding of the National Labor Relations 
Board as back pay or damages attributable 
to any period of time occurring after the 
date of commencement of the case under 
this title, as a result of a violation of Fed-
eral or State law by the debtor, without re-
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