(B) in subparagraph (A), as so designated, 
by striking ‘‘Any payment’’ and inserting ‘‘Sub-
ject to subparagraph (B), any payment’’; and 
(C) by adding at the end the following: 
‘‘(B)(i) Subject to clause (ii), the plan does 
not provide for payments or other distributions 
to, or for the benefit of, an insider of the debt-
or, a senior executive officer of the debtor, any 
of the 20 highest compensated employees of the 
debtor who are not insiders or senior executive 
officers, any department or division manager of 
the debtor, or any consultant providing services 
to the debtor, unless— 
‘‘(I) the payments or other distribu-
tions are part of a program that is gen-
erally applicable to all full-time employees 
of the debtor; and 
‘‘(II) the payments or distributions do 
not exceed the compensation limits estab-
lished in section 503(c)(1) in comparison 
to the nonmanagement workforce of the 
debtor. 
‘‘(ii) The requirement under clause (i) 
shall not apply to the compensation described in 
paragraph (5)(C).’’; and 
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(2) in paragraph (5)— 
(A) in subparagraph (A)(ii), by striking 
‘‘and’’ at the end; 
(B) in subparagraph (B), by striking the 
period at the end and inserting ‘‘; and’’; and 
(C) by adding at the end the following: 
‘‘(C) the compensation disclosed under 
subparagraph (B) has been approved by, or is 
subject to the approval of, the court as— 
‘‘(i) reasonable when compared to in-
dividuals holding comparable positions at 
comparable companies in the same indus-
try as the debtor; 
‘‘(ii) not more than the amount cor-
responding to the 50th percentile of the 
compensation of the individuals described 
in clause (i); and 
‘‘(iii) not excessive or disproportionate 
in light of economic losses of the non-
management workforce of the debtor.’’. 
SEC. 302. LIMITATIONS ON EXECUTIVE COMPENSATION EN-
HANCEMENTS. 
Section 503(c) of title 11, United States Code, is 
amended— 
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(1) In the matter preceding paragraph (1), by 
inserting ‘‘and subject to section 363(b)(3)’’ after 
‘‘subsection (b)’’; 
(2) in paragraph (1)— 
(A) in the matter preceding subparagraph 
(A)— 
(i) by inserting ‘‘, a senior executive 
officer of the debtor, any the 20 highest 
compensated employees of the debtor who 
are not insiders or senior executive officers, 
any department or division manager of the 
debtor, or any consultant providing serv-
ices to the debtor’’ before ‘‘for the pur-
pose’’; and 
(ii) 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 in-
centive, stock, or other compensation in ef-
fect before the date of the commencement 
of the case,’’ after ‘‘remain with the debt-
or’s business,’’; 
(B) by amending subparagraph (A) to read 
as follows: 
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‘‘(A) the transfer or obligation is part of a 
program that is generally applicable to all full- 
time employees of the debtor; and’’; 
(C) by striking subparagraph (B); 
(D) by redesignating subparagraph (C) as 
subparagraph (B); 
(E) in subparagraph (B), as so redesig-
nated— 
(i) in clause (i), by striking ‘‘10’’ and 
inserting ‘‘2’’; and 
(ii) in clause (ii)— 
(I) by striking ‘‘25’’ and insert-
ing ‘‘10’’; and 
(II) by striking ‘‘insider’’ and in-
serting ‘‘person’’; 
(3) in paragraph (2)— 
(A) in the matter preceding subparagraph 
(A), by inserting ‘‘, a senior executive officer of 
the debtor, any of the 20 highest compensated 
employees of the debtor who are not insiders or 
senior executive officers, any department or di-
vision manager of the debtor, or any consultant 
providing services to the debtor,’’ before ‘‘, un-
less’’; and 
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(B) in subparagraph (B), by striking ‘‘10’’ 
and inserting ‘‘2’’; and 
(4) by amending paragraph (3) to read as fol-
lows: 
‘‘(3) other transfers or obligations to, or for the 
benefit of, an insider of the debtor, a senior execu-
tive officer of the debtor, the 20 highest com-
pensated employees of the debtor who are not insid-
ers or senior executive officers, any department or 
division manager of the debtor, or any consultant 
providing services to the debtor that are outside of 
the ordinary course of business, except as part of a 
plan of reorganization and subject to the approval of 
the court under paragraphs (4) and (5) of section 
1129(a).’’. 
SEC. 303. PROHIBITION AGAINST SPECIAL COMPENSATION 
PAYMENTS. 
Section 363 of title 11, United States Code, is 
amended— 
(1) in subsection (b), by adding at the end the 
following: 
‘‘(3) No plan, program, or other transfer or ob-
ligation to, or for the benefit of, an insider of the 
debtor, a senior executive officer of the debtor, the 
20 highest compensated employees of the debtor who 
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are not insiders or senior executive officers, any de-
partment or division manager of the debtor, or any 
consultant providing services to the debtor shall be 
approved if the debtor has, on or after the date that 
is 1 year before the date of the filing of the peti-
tion— 
‘‘(A) discontinued any plan, program, pol-
icy, or practice of paying severance pay to the 
nonmanagement workforce of the debtor; or 
‘‘(B) modified any plan, program, policy, 
or practice described in subparagraph (A) in 
order to reduce benefits under the plan, pro-
gram, policy, or practice.’’; and 
(2) in subsection (c)— 
(A) in paragraph (1), by striking ‘‘If the 
business’’ and inserting ‘‘Except as provided in 
paragraph (5), if the business’’; and 
(B) by adding at the end the following: 
‘‘(5) In the case of a transaction that is a 
transfer or obligation described in paragraphs (1) 
through (3) of section 503(c), the trustee shall ob-
tain the prior approval of the court after notice and 
an opportunity for a hearing.’’. 
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tirees of the debtor on are after the date that is 1 year 
before the date of the commencement of the case.’’. 
SEC. 305. RECOVERY OF EXECUTIVE COMPENSATION. 
(a) IN GENERAL.—Subchapter III of chapter 5 of 
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 section 
1113(d) or section 1114(g), by which the debtor reduces 
the cost of its obligations under a collective bargaining 
agreement or a plan, fund, or program for retiree benefits 
(as defined in section 1114(a)), the court, in granting re-
lief, shall determine the percentage diminution in the value 
of the obligations when compared to the obligations of the 
debtor under the collective bargaining agreement, or with 
respect to retiree benefits, as of the date of the commence-
ment of the case under this title before granting such re-
lief. In making its determination, the court shall include 
reductions in benefits, if any, as a result of the termi-
nation pursuant to section 4041 or 4042 of the Employee 
Retirement Income Security Act of 1974 (29 U.S.C. 1341, 
1342), of a defined benefit plan administered by the debt-
or, or for which the debtor is a contributing employer, ef-
fective at any time on or after 180 days before the date 
of the commencement of a case under this title. The court 
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shall not take into account pension benefits paid or pay-
able under that Act as a result of any such termination. 
‘‘(b) If a defined benefit pension plan administered 
by the debtor, or for which the debtor is a contributing 
employer, has been terminated pursuant to section 4041 
or 4042 of the Employee Retirement Income Security Act 
of 1974 (29 U.S.C. 1341, 1342), 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 section 1113(d), or section 1114(g), 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 before such 
termination. The court shall not take into account pension 
benefits paid or payable under title IV of the Employee 
Retirement Income Security Act of 1974 (29 U.S.C. 1301 
et seq.) 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 
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directors of the debtor within the year before the date of 
the commencement of the case, and any individual serving 
as chairman or lead director of the board of directors at 
the time of the granting of relief under section 1113 or 
1114 or, if no such relief has been granted, the termi-
nation of the defined benefit plan. 
‘‘(d) The trustee or a committee appointed pursuant 
to section 1102 may commence an action to recover such 
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 subsection (c) of this section if there is a reason-
able likelihood that such compensation is intended to reim-
burse or replace compensation recovered by the estate 
under this section.’’. 
(b) TECHNICAL AND CONFORMING AMENDMENT.— 
The table of sections for chapter 5 of title 11, United 
States Code, is amended by inserting after the item relat-
ing to section 562 the following: 
‘‘563. Recovery of executive compensation.’’. 
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TITLE IV—OTHER PROVISIONS 
SEC. 401. 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. 402. 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 inserting after paragraph (28) the fol-
lowing: 
‘‘(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 
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. 403. EFFECT ON COLLECTIVE BARGAINING AGREE-
MENTS UNDER THE RAILWAY LABOR ACT. 
Section 103 of title 11, United States Code, is 
amended by adding at the end the following: 
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‘‘(m) Notwithstanding sections 365, 1113, or 1114, 
neither the court nor the trustee may change the wages, 
working conditions, or retirement benefits of an employee 
or a retiree of the debtor established by a collective bar-
gaining agreement that is subject to the Railway Labor 
Act (45 U.S.C. 151 et seq.), except in accordance with 
section 6 of that Act (45 U.S.C. 156).’’. 
Æ 
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