Title: No Bonuses Ahead of Bankruptcy Filing Act of 2020
Policy area: Finance and Financial Sector

Summary:
No Bonuses Ahead of Bankruptcy Filing Act of 2020
This bill prohibits debtors in bankruptcy proceedings from paying bonuses to certain individuals for two years, including insiders (such as relatives) and highly compensated employees.

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 7279 Introduced in House (IH)]

<DOC>






116th CONGRESS
  2d Session
                                H. R. 7279

To amend title 11 of the United States Code to prohibit the payment of 
 bonuses to highly compensated individuals employed by the debtor and 
insiders of the debtor to perform services during the bankruptcy case, 
                        and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             June 18, 2020

  Mr. Steube introduced the following bill; which was referred to the 
                       Committee on the Judiciary

_______________________________________________________________________

                                 A BILL


 
To amend title 11 of the United States Code to prohibit the payment of 
 bonuses to highly compensated individuals employed by the debtor and 
insiders of the debtor to perform services during the bankruptcy case, 
                        and for other purposes.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``No Bonuses Ahead of Bankruptcy 
Filing Act of 2020''.

SEC. 2. AMENDMENT.

    Section 503 of title 11 of the United States Code is amended by 
adding at the end the following:
    ``(d)(1) During the 2-year period ending 1 year after the date of 
the filing of the petition and notwithstanding any other provision of 
this section, there shall neither be allowed nor paid a bonus to--
            ``(A) an individual employed by the debtor at an annual 
        rate of compensation exceeding $250,000;
            ``(B) an insider of the debtor; or
            ``(C) an individual employed by the debtor to the extent 
        that such bonus would cause that individual's annual rate of 
        compensation to exceed $250,000.
    ``(2) For purposes of this subsection, the term `bonus' means a 
transfer to, or obligation incurred for the benefit of, an individual 
employed by the debtor or insider of the debtor as compensation for 
services in an amount that--
            ``(A) is in addition to the existing wages, salary, or base 
        compensation of an insider of the debtor or individual employed 
        by the debtor; and
            ``(B) can be construed as a form of retention, incentive, 
        or reward related to the services provided to the debtor by the 
        insider or the individual employed by the debtor.
The term `bonus' does not include a sales commission. Nor does the term 
`bonus' include any transfer or obligation pursuant to the terms of a 
collective bargaining agreement.
    ``(3) The term `an individual employed by the debtor' includes, but 
is not limited to, an employee, consultant, or contractor.''.

SEC. 3. EFFECTIVE DATE; APPLICATION OF AMENDMENT.

    (a) Effective Date.--Except as provided in subsection (b), this Act 
and the amendment made by this Act shall take effect on the date of the 
enactment of this Act.
    (b) Application of Amendment.--The amendment made by this Act shall 
apply only with respect to cases commenced under title 11 of the United 
States Code on or after the date of the enactment of this Act.
                                 <all>