Protecting Employees and Retirees in Business Bankruptcies Act of 2007

Bill: 110-s-2092
Sponsor: Sen. Durbin, Richard J. [D-IL]
Introduced: 2007-09-25 in the Senate
Policy area: Finance and Financial Sector
Subjects: Bankruptcy
Collective bargaining
Commerce
Corporate reorganizations
Defined benefit pension plans
Defined contribution plans
Employee benefit plans
Executive compensation
Fraud
Health
Labor and Employment
Law
Layoffs
Pension funds
Retiree health benefits
Securities
Severance pay
Trusts and trustees

Summary:
action_date: 2007-09-25
text: 
Protecting Employees and Retirees in Business Bankruptcies Act of 2007 - Amends federal bankruptcy law to increase the maximum amount per individual or corporation of unsecured claims ranked in the fourth (wages, salaries, or commissions) and fifth (employee benefit plan contributions) order of priority.
 
Includes within the scope of a claim in bankruptcy certain equity securities held in a defined contribution plan for the benefit of certain individuals.
 
Ranks in sixth order of priority the diminished value of debtor's equity securities held in a defined contribution plan if the employer or plan sponsor committed fraud regarding the plan.
 
Permits within administrative expenses certain severance pay for termination or layoffs.
 
Prohibits certain senior executive compensation from being disproportionate in light of economic concessions by debtor's nonmanagement workforce.
 
Disallows as an administrative expense specified executive compensation enhancements.
 
Revises requirements governing: (1) rejection of collective bargaining agreements; (2) insurance benefits for retired employees; and (3) the status of certain employee benefits in a sale of business assets. 
 
Allows defined benefit plan participants to file claims for certain shortfalls in pension benefits.
 
Permits inclusion within the necessary costs and expenses of preserving property the mandatory recovery of unpaid obligations owed to employees.
 
Directs the court to consider the extent to which alternative reorganization plans maintain: (1) jobs; (2) defined benefit plans; and (3) retiree health benefits.
 
Prohibits assumption of deferred compensation for the benefit of insiders or senior management if an employee defined benefit plan has been terminated. 
 
Limits the recovery of executive compensation if the debtor has reduced its contractual obligations under either a collective bargaining agreement or retiree benefits plan.
 
Excepts from an automatic stay: (1) a dispute resolution proceeding established by a collective bargaining agreement prior to commencement of bankruptcy; or (2) an award or settlement under such proceeding.
 
Authorizes the bankruptcy trustee to avoid transfers made for the benefit of an insider or certain consultants in anticipation of bankruptcy. 
 
Revises prerequisites to court confirmation of a business reorganization plan which continues retiree benefits.


Legislative actions:
action_date: 2007-09-25
text: Read twice and referred to the Committee on the Judiciary. (text of measure as introduced: CR S12063-12067)
action_date: 2007-09-25
text: Sponsor introductory remarks on measure. (CR S12063)
action_date: 2007-09-25
text: Introduced in Senate