I 
113TH CONGRESS 
1ST SESSION 
H. R. 100 
To amend title 11, United States Code, to improve protections for employees 
and retirees in business bankruptcies. 
IN THE HOUSE OF REPRESENTATIVES 
JANUARY 3, 2013 
Mr. CONYERS (for himself, Mr. COHEN, Mr. DEUTCH, Mr. NADLER, Mr. 
JOHNSON of Georgia, Mr. WATT, Mr. GEORGE MILLER of California, 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 2013’’. 
(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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gard to the time of the occurrence of un-
lawful conduct on which the award is 
based or to whether any services were ren-
dered on or after the commencement of the 
case, including an award by a court under 
section 2901 of title 29, United States 
Code, of up to 60 days’ pay and benefits 
following a layoff that occurred or com-
menced at a time when such award period 
includes a period on or after the com-
mencement of the case, if the court deter-
mines that payment of wages and benefits 
by reason of the operation of this clause 
will not substantially increase the prob-
ability of layoff or termination of current 
employees or of nonpayment of domestic 
support obligations during the case under 
this title.’’. 
TITLE II—REDUCING EMPLOY-
EES’ AND RETIREES’ LOSSES 
SEC. 201. REJECTION OF COLLECTIVE BARGAINING AGREE-
MENTS. 
Section 1113 of title 11, United States Code, is 
amended by striking subsections (a) through (f) and in-
serting the following: 
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‘‘(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 this section. 
Hereinafter in this section, a reference to the trustee in-
cludes a reference to the debtor in possession. 
‘‘(b) No provision of this title shall be construed to 
permit the trustee to unilaterally terminate or alter any 
provision of a collective bargaining agreement before com-
plying with this section. The trustee shall timely pay all 
monetary obligations arising under the terms of the collec-
tive bargaining agreement. Any such payment required to 
be made before a plan confirmed under section 1129 is 
effective has the status of an allowed administrative ex-
pense under section 503. 
‘‘(c)(1) If the trustee seeks modification of a collec-
tive bargaining agreement, then the trustee shall provide 
notice to the labor organization representing the employ-
ees covered by the agreement that modifications are being 
proposed under this section, and shall promptly provide 
an initial proposal for modifications to the agreement. 
Thereafter, the trustee shall confer in good faith with the 
labor organization, at reasonable times and for a reason-
able period in light of the complexity of the case, in at-
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tempting to reach mutually acceptable modifications of 
such agreement. 
‘‘(2) The initial proposal and subsequent proposals 
by the trustee for modification of a collective bargaining 
agreement shall be based upon a business plan for the re-
organization of the debtor, and shall reflect the most com-
plete and reliable information available. The trustee shall 
provide to the labor organization all information that is 
relevant for negotiations. The court may enter a protective 
order to prevent the disclosure of information if disclosure 
could compromise the debtor’s position with respect to its 
competitors in the industry, subject to the needs of the 
labor organization to evaluate the trustee’s proposals and 
any application for rejection of the agreement or for in-
terim relief pursuant to this section. 
‘‘(3) In consideration of Federal policy encouraging 
the practice and process of collective bargaining and in 
recognition of the bargained-for expectations of the em-
ployees covered by the agreement, modifications proposed 
by the trustee— 
‘‘(A) shall be proposed only as part of a pro-
gram of workforce and nonworkforce cost savings 
devised for the reorganization of the debtor, includ-
ing savings in management personnel costs; 
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‘‘(B) shall be limited to modifications designed 
to achieve a specified aggregate financial contribu-
tion for the employees covered by the agreement 
(taking into consideration any labor cost savings ne-
gotiated within the 12-month period before the filing 
of the petition), and shall be not more than the min-
imum savings essential to permit the debtor to exit 
bankruptcy, such that confirmation of a plan of re-
organization is not likely to be followed by the liq-
uidation, or the need for further financial reorga-
nization, of the debtor (or any successor to the debt-
or) in the short-term; and 
‘‘(C) shall not be disproportionate or overly bur-
den the employees covered by the agreement, either 
in the amount of the cost savings sought from such 
employees or the nature of the modifications. 
‘‘(d)(1) If, after a period of negotiations, the trustee 
and the labor organization have not reached an agreement 
over mutually satisfactory modifications, and further ne-
gotiations are not likely to produce mutually satisfactory 
modifications, the trustee may file a motion seeking rejec-
tion of the collective bargaining agreement after notice 
and a hearing. Absent agreement of the parties, no such 
hearing shall be held before the expiration of the 21-day 
period beginning on the date on which notice of the hear-
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ing is provided to the labor organization representing the 
employees covered by the agreement. Only the debtor and 
the labor organization may appear and be heard at such 
hearing. An application for rejection shall seek rejection 
effective upon the entry of an order granting the relief. 
‘‘(2) In consideration of Federal policy encouraging 
the practice and process of collective bargaining and in 
recognition of the bargained-for expectations of the em-
ployees covered by the agreement, the court may grant a 
motion seeking rejection of a collective bargaining agree-
ment only if, based on clear and convincing evidence— 
‘‘(A) the court finds that the trustee has com-
plied with the requirements of subsection (c); 
‘‘(B) the court has considered alternative pro-
posals by the labor organization and has concluded 
that such proposals do not meet the requirements of 
paragraph (3)(B) of subsection (c); 
‘‘(C) the court finds that further negotiations 
regarding the trustee’s proposal or an alternative 
proposal by the labor organization are not likely to 
produce an agreement; 
‘‘(D) the court finds that implementation of the 
trustee’s proposal shall not— 
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‘‘(i) cause a material diminution in the 
purchasing power of the employees covered by 
the agreement; 
‘‘(ii) adversely affect the ability of the 
debtor to retain an experienced and qualified 
workforce; or 
‘‘(iii) impair the debtor’s labor relations 
such that the ability to achieve a feasible reor-
ganization would be compromised; and 
‘‘(E) the court concludes that rejection of the 
agreement and immediate implementation of the 
trustee’s proposal is essential to permit the debtor to 
exit bankruptcy, such that confirmation of a plan of 
reorganization is not likely to be followed by liquida-
tion, or the need for further financial reorganization, 
of the debtor (or any successor to the debtor) in the 
short term. 
‘‘(3) If the trustee has implemented a program of in-
centive pay, bonuses, or other financial returns for insid-
ers, senior executive officers, or the 20 next most highly 
compensated employees or consultants providing services 
to the debtor during the bankruptcy, or such a program 
was implemented within 180 days before the date of the 
filing of the petition, the court shall presume that the 
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trustee has failed to satisfy the requirements of subsection 
(c)(3)(C). 
‘‘(4) In no case shall the court enter an order reject-
ing a collective bargaining agreement that would result in 
modifications to a level lower than the level proposed by 
the trustee in the proposal found by the court to have com-
plied with the requirements of this section. 
‘‘(5) At any time after the date on which an order 
rejecting a collective bargaining agreement is entered, or 
in the case of an agreement entered into between the 
trustee and the labor organization providing mutually sat-
isfactory modifications, at any time after such agreement 
has been entered into, the labor organization 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 request only if the increase or other relief is not incon-
sistent with the standard set forth in paragraph (2)(E). 
‘‘(e) During a period in which a collective bargaining 
agreement at issue under this section continues in effect, 
and if essential to the continuation of the debtor’s busi-
ness or in order to avoid irreparable damage to the estate, 
the court, after notice and a hearing, may authorize the 
trustee to implement interim changes in the terms, condi-
tions, wages, benefits, or work rules provided by the collec-
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tive bargaining agreement. Any hearing under this sub-
section shall be scheduled in accordance with the needs 
of the trustee. The implementation of such interim 
changes shall not render the application for rejection 
moot. 
‘‘(f) Rejection of a collective bargaining agreement 
constitutes a breach of the agreement, and shall be effec-
tive no earlier than the entry of an order granting such 
relief. Notwithstanding the foregoing, solely for purposes 
of determining and allowing a claim arising from the rejec-
tion of a collective bargaining agreement, rejection shall 
be treated as rejection of an executory contract under sec-
tion 365(g) and shall be allowed or disallowed in accord-
ance with section 502(g)(1). No claim for rejection dam-
ages shall be limited by section 502(b)(7). Economic self- 
help by a labor organization shall be permitted upon a 
court order granting a motion to reject a collective bar-
gaining agreement under subsection (d) or pursuant to 
subsection (e), and no provision of this title or of any other 
provision of Federal or State law may be construed to the 
contrary. 
‘‘(g) The trustee shall provide for the reasonable fees 
and costs incurred by a labor organization under this sec-
tion, upon request and after notice and a hearing. 
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‘‘(h) A collective bargaining agreement that is as-
sumed shall be assumed in accordance with section 365.’’. 
SEC. 202. PAYMENT OF INSURANCE BENEFITS TO RETIRED 
EMPLOYEES. 
Section 1114 of title 11, United States Code, is 
amended— 
(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 (b)(2), by inserting after ‘‘sec-
tion’’ the following: ‘‘, and a labor organization serv-
ing as the authorized representative under sub-
section (c)(1),’’; 
(3) in subsection (f), by striking ‘‘(f)’’ and all 
that follows through paragraph (2) and inserting the 
following: 
‘‘(f)(1) If a trustee seeks modification of retiree bene-
fits, then the trustee shall provide a notice to the author-
ized representative that modifications are being proposed 
pursuant to this section, and shall promptly provide an 
initial proposal. Thereafter, the trustee shall confer in 
good faith with the authorized representative at reason-
able times and for a reasonable period in light of the com-
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plexity of the case in attempting to reach mutually satis-
factory modifications. 
‘‘(2) The initial proposal and subsequent proposals 
by the trustee shall be based upon a business plan for the 
reorganization of the debtor and shall reflect the most 
complete and reliable information available. The trustee 
shall provide to the authorized representative all informa-
tion that is relevant for the negotiations. The court may 
enter a protective order to prevent the disclosure of infor-
mation if disclosure could compromise the debtor’s posi-
tion with respect to its competitors in the industry, subject 
to the needs of the authorized representative to evaluate 
the trustee’s proposals and an application pursuant to 
subsection (g) or (h). 
‘‘(3) Modifications proposed by the trustee— 
‘‘(A) shall be proposed only as part of a pro-
gram of workforce and nonworkforce cost savings 
devised for the reorganization of the debtor, includ-
ing savings in management personnel costs; 
‘‘(B) shall be limited to modifications that are 
designed to achieve a specified aggregate financial 
contribution for the retiree group represented by the 
authorized representative (taking into consideration 
any cost savings implemented within the 12-month 
period before the date of filing of the petition with 
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respect to the retiree group), and shall be no more 
than the minimum savings essential to permit the 
debtor to exit bankruptcy, such that confirmation of 
a plan of reorganization is not likely to be followed 
by the liquidation, or the need for further financial 
reorganization, of the debtor (or any successor to 
the debtor) in the short term; and 
‘‘(C) shall not be disproportionate or overly bur-
den the retiree group, either in the amount of the 
cost savings sought from such group or the nature 
of the modifications.’’; 
(4) in subsection (g)— 
(A) by striking ‘‘(g)’’ and all that follows 
through the semicolon at the end of paragraph 
(3) and inserting the following: 
‘‘(g)(1) If, after a period of negotiations, the trustee 
and the authorized representative have not reached agree-
ment over mutually satisfactory modifications and further 
negotiations are not likely to produce mutually satisfac-
tory modifications, then the trustee may file a motion 
seeking modifications in the payment of retiree benefits 
after notice and a hearing. Absent agreement of the par-
ties, no such hearing shall be held before the expiration 
of the 21-day period beginning on the date on which notice 
of the hearing is provided to the authorized representative. 
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Only the debtor and the authorized representative may ap-
pear and be heard at such hearing. 
‘‘(2) The court may grant a motion to modify the 
payment of retiree benefits only if, based on clear and con-
vincing evidence— 
‘‘(A) the court finds that the trustee has com-
plied with the requirements of subsection (f); 
‘‘(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 subsection (f)(3)(B); 
‘‘(C) the court finds that further negotiations 
regarding the trustee’s proposal or an alternative 
proposal by the authorized representative are not 
likely to produce a mutually satisfactory agreement; 
‘‘(D) the court finds that implementation of the 
proposal shall not cause irreparable harm to the af-
fected retirees; and 
‘‘(E) the court concludes that an order granting 
the motion and immediate implementation of the 
trustee’s proposal is essential to permit the debtor to 
exit bankruptcy, such that confirmation of a plan of 
reorganization is not likely to be followed by liquida-
tion, or the need for further financial reorganization, 
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of the debtor (or a successor to the debtor) in the 
short term. 
‘‘(3) If a trustee has implemented a program of in-
centive pay, bonuses, or other financial returns for insid-
ers, senior executive officers, or the 20 next most highly 
compensated employees or consultants providing services 
to the debtor during the bankruptcy, or such a program 
was implemented within 180 days before the date of the 
filing of the petition, the court shall presume that the 
trustee has failed to satisfy the requirements of subpara-
graph (f)(3)(C).’’; and 
(B) by striking ‘‘except that in no case’’ 
and inserting the following: 
‘‘(4) In no case’’; and 
(5) by striking subsection (k) and redesignating 
subsections (l) and (m) as subsections (k) and (l), 
respectively. 
SEC. 203. PROTECTION OF EMPLOYEE BENEFITS IN A SALE 
OF ASSETS. 
Section 363(b) of title 11, United States Code, is 
amended 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, preserve terms and condi-
tions of employment, and assume or match pension and 
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retiree health benefit obligations in determining whether 
an offer constitutes the highest or best offer for such prop-
erty.’’. 
SEC. 204. CLAIM FOR PENSION LOSSES. 
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, or by a labor organization rep-
resenting such participants, in a defined benefit plan ter-
minated under section 4041 or 4042 of the Employee Re-
tirement Income Security Act of 1974, for any shortfall 
in pension benefits accrued as of the effective date of the 
termination 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. 
‘‘(m) The court shall allow a claim of a kind described 
in section 101(5)(C) by an active or retired participant 
in a defined contribution plan (within the meaning of sec-
tion 3(34) of the Employee Retirement Income Security 
Act of 1974 (29 U.S.C. 1002(34))), or by a labor organi-
zation representing such participants. The amount of such 
claim shall be measured by the market value of the stock 
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at the time of contribution to, or purchase by, the plan 
and the value as of the commencement of the case.’’. 
SEC. 205. PAYMENTS BY SECURED LENDER. 
Section 506(c) of title 11, United States Code, is 
amended by adding at the end the following: ‘‘If employees 
have not received wages, accrued vacation, severance, or 
other benefits owed under the policies and practices of the 
debtor, or pursuant to the terms of a collective bargaining 
agreement, for services rendered on and after the date of 
the commencement of the case, then such unpaid obliga-
tions shall be deemed necessary costs and expenses of pre-
serving, or disposing of, property securing an allowed se-
cured claim and shall be recovered even if the trustee has 
otherwise waived the provisions of this subsection under 
an agreement with the holder of the allowed secured claim 
or a successor or predecessor in interest.’’. 
SEC. 206. PRESERVATION OF JOBS AND BENEFITS. 
Title 11, United States Code, is amended— 
(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 principal purpose the reorganization of 
its business to preserve going concern value to the max-
imum extent possible through the productive use of its as-
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sets and the preservation of jobs that will sustain produc-
tive economic activity.’’; 
(2) in section 1129(a), as amended by section 
104, by adding at the end the following: 
‘‘(18) The debtor has demonstrated that the re-
organization preserves going concern value to the 
maximum extent possible through the productive use 
of the debtor’s assets and preserves jobs that sustain 
productive economic activity.’’; 
(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— 
‘‘(1) consider the extent to which each plan 
would preserve going concern value through the pro-
ductive use of the debtor’s assets and the preserva-
tion of jobs that sustain productive economic activ-
ity; and 
‘‘(2) confirm the plan that better serves such 
interests. 
A plan that incorporates the terms of a settlement with 
a labor organization representing employees of the debtor 
shall presumptively constitute the plan that satisfies this 
subsection.’’; and 
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(4) in the table of sections for chapter 11, by 
inserting the following before the item relating to 
section 1101: 
‘‘1100. Statement of purpose.’’. 
SEC. 207. TERMINATION OF EXCLUSIVITY. 
Section 1121(d) of title 11, United States Code, is 
amended by adding at the end the following: 
‘‘(3) For purposes of this subsection, cause for reduc-
ing the 120-day period or the 180-day period includes the 
following: 
‘‘(A) The filing of a motion pursuant to section 
1113 seeking rejection of a collective bargaining 
agreement if a plan based upon an alternative pro-
posal by the labor organization is reasonably likely 
to be confirmed within a reasonable time. 
‘‘(B) The proposed filing of a plan by a pro-
ponent other than the debtor, which incorporates the 
terms of a settlement with a labor organization if 
such plan is reasonably likely to be confirmed within 
a reasonable time.’’. 
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TITLE III—RESTRICTING EXECU-
TIVE 
COMPENSATION 
PRO-
GRAMS 
SEC. 301. EXECUTIVE COMPENSATION UPON EXIT FROM 
BANKRUPTCY. 
Section 1129(a) of title 11, United States Code, is 
amended— 
(1) in paragraph (4), by adding at the end the 
following: ‘‘Except for compensation subject to re-
view under paragraph (5), payments or other dis-
tributions under the plan to or for the benefit of in-
siders, senior executive officers, and any of the 20 
next most highly compensated employees or consult-
ants providing services to the debtor, shall not be 
approved except as part of a program of payments 
or distributions generally applicable to employees of 
the debtor, and only to the extent that the court de-
termines that such payments are not excessive or 
disproportionate compared to distributions to the 
debtor’s nonmanagement workforce.’’; and 
(2) in paragraph (5)— 
(A) in subparagraph (A)(ii), by striking 
‘‘and’’ at the end; and 
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(B) 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 individuals holding 
comparable 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.’’. 
SEC. 302. LIMITATIONS ON EXECUTIVE COMPENSATION EN-
HANCEMENTS. 
Section 503(c) of title 11, United States Code, is 
amended— 
(1) in paragraph (1)— 
(A) by inserting ‘‘, a senior executive offi-
cer, or any of the 20 next most highly com-
pensated employees or consultants’’ after ‘‘an 
insider’’; 
(B) 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 before the date 
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of the commencement of the case,’’ after ‘‘re-
main with the debtor’s business,’’; and 
(C) by inserting ‘‘clear and convincing’’ be-
fore ‘‘evidence in the record’’; and 
(2) by amending paragraph (3) to read as fol-
lows: 
‘‘(3) other transfers or obligations, to or for the 
benefit of insiders, senior executive officers, man-
agers, or consultants providing services to the debt-
or, in the absence of a finding by the court, based 
upon clear and convincing evidence, and without def-
erence 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 debtor, in either case, 
because of the essential nature of the services pro-
vided, and then only to the extent that the court 
finds such transfers or obligations are reasonable 
compared to individuals holding comparable posi-
tions at comparable companies in the same industry 
and not disproportionate in light of economic conces-
sions by the debtor’s nonmanagement workforce dur-
ing the case.’’. 
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SEC. 303. ASSUMPTION OF EXECUTIVE BENEFIT PLANS. 
Section 365 of title 11, United States Code, is 
amended— 
(1) in subsection (a), by striking ‘‘and (d)’’ and 
inserting ‘‘(d), (q), and (r)’’; and 
(2) by adding at the end the following: 
‘‘(q) No deferred compensation arrangement for the 
benefit of insiders, senior executive officers, or any of the 
20 next most highly compensated employees 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 before the date of 
the commencement of the case. 
‘‘(r) No plan, fund, program, or contract to provide 
retiree benefits for insiders, senior executive officers, or 
any of the 20 next most highly compensated employees 
of the debtor shall be assumed if the debtor has obtained 
relief under subsection (g) or (h) of section 1114 to impose 
reductions in retiree benefits or under subsection (d) or 
(e) of section 1113 to impose reductions in the health ben-
efits of active employees of the debtor, or reduced or elimi-
nated health benefits for active or retired employees within 
180 days before the date of the commencement of the 
case.’’. 
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SEC. 304. RECOVERY OF EXECUTIVE COMPENSATION. 
Title 11, United States Code, is amended by inserting 
after section 562 the following: 
‘‘SEC. 563. RECOVERY OF EXECUTIVE COMPENSATION. 
‘‘(a) If a debtor has obtained relief under subsection 
(d) of section 1113, or subsection (g) of section 1114, by 
which the debtor reduces the cost of its obligations under 
a collective bargaining agreement or a plan, fund, or pro-
gram for retiree benefits as defined in section 1114(a), 
the court, in granting relief, shall determine the percent-
age diminution in the value of the obligations when com-
pared to the debtor’s obligations under the collective bar-
gaining agreement, or with respect to retiree benefits, as 
of the date of the commencement of the case under this 
title before granting such relief. In making its determina-
tion, the court shall include reductions in benefits, if any, 
as a result of the termination pursuant 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 pension benefits paid or pay-
able under such 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 
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employer, 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 (d) 
of section 1113, or subsection (g) of section 1114, then 
the court, upon motion of a party in interest, shall deter-
mine the percentage diminution in the value of benefit ob-
ligations when compared to the total benefit liabilities be-
fore such termination. The court shall not take into ac-
count pension benefits paid or payable under title IV of 
the Employee Retirement 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 or lead director of the board of directors at 
the time of the granting of relief under section 1113 or 
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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) if there is a reasonable likelihood 
that such compensation is intended to reimburse or re-
place compensation recovered by the estate under this sec-
tion.’’. 
SEC. 305. 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-
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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 
benefit of the estate. The costs of recovery shall be borne 
by the estate.’’. 
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; 
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(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 
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.’’. 
Æ 
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