No Bonuses Ahead of Bankruptcy Filing Act of 2020

Bill: 116-hr-7279
Sponsor: full_name: Rep. Steube, W. Gregory [R-FL-17]
Introduced: 2020-06-18
Policy area: Finance and Financial Sector
Subjects: Bankruptcy

Corporate finance and management

Wages and earnings
Latest action: action_date: 2020-06-18
text: Referred to the House Committee on the Judiciary.

Summaries:
action_date: 2020-06-18
action_desc: Introduced in House
text: <p><b>No Bonuses Ahead of Bankruptcy Filing Act of 2020</b></p> <p>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. </p>

tv_txt: I 116th CONGRESS 2d Session H. R. 7279 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.

1. Short title This Act may be cited as the No Bonuses Ahead of Bankruptcy Filing Act of 2020 . 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. . 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.