SLAP Act

Bill: 117-s-5097
Sponsor: full_name: Sen. Manchin, Joe, III [D-WV]
Introduced: 2022-11-15
Policy area: Finance and Financial Sector
Latest action: action_date: 2022-11-15
text: Read twice and referred to the Committee on the Judiciary.

Summaries:
action_date: 2022-11-15
action_desc: Introduced in Senate
text: <p><b>Stop Looting American Pensions Act of 2022 or the SLAP Act </b></p> <p>This bill revises certain bankruptcy requirements, including by providing additional protections for employee pay and pensions in the event of a bankruptcy. </p> <p>Specifically, the bill </p> <ul> <li>revises the bankruptcy priority requirements of claims for wages and contributions to employee benefit plans, including by increasing the cap of these payments and by eliminating the time period limitation for which unpaid wages and contributions may be claimed;</li> <li> increases the bankruptcy priority of minimum funding contributions towards employee pension benefit plans and withdrawal liability and requires companies to continue making these payments during bankruptcy; </li> <li>expands restrictions on executive pay;</li> <li>places restrictions on the sale of property in bankruptcy proceedings, including by requiring reasonable payment; and</li> <li>extends look back periods regarding fraudulent transfers from two years to six years.</li> </ul>

tv_txt: II 117th CONGRESS 2d Session S. 5097 IN THE SENATE OF THE UNITED STATES November 15, 2022 Mr. Manchin introduced the following bill; which was read twice and referred to the Committee on the Judiciary A BILL To provide protections for pensions in bankruptcy proceedings, and for other purposes.

1. Short title This Act may be cited as the Stop Looting American Pensions Act of 2022 or the SLAP Act . 2. Amendments to the Employee Retirement Income Security Act of 1974 and the Internal Revenue Code of 1986 (a) Minimum funding standard (1) Amendment to the Employee Retirement Income Security Act of 1974 Section 302(a) of the Employee Retirement Income Security Act of 1974 ( 29 U.S.C. 1082(a) ) is amended by adding at the end the following: (3) Cases under title 11 A plan shall continue to be required to satisfy the minimum funding standard under paragraph (1) if a case under title 11, United States Code, is commenced with respect to the employer unless the Secretary of the Treasury has waived the requirements of this subsection with respect to the plan under subsection (c). . (2) Amendment to the Internal Revenue Code of 1986 Section 412(a) of the Internal Revenue Code of 1986 is amended by adding at the end the following: (3) Cases under title 11 A plan shall continue to be required to satisfy the minimum funding standard under paragraph (1) if a case under title 11, United States Code, is commenced with respect to the employer unless the Secretary has waived the requirements of this subsection with respect to the plan under subsection (c). . (b) Obligation To contribute Section 4212 of the Employee Retirement Income Security Act of 1974 ( 29 U.S.C. 1392 ) is amended by adding at the end the following: (d) Cases under title 11 A person shall be subject to an obligation to contribute under this part notwithstanding the commencement of a case under title 11, United States Code, with respect to that person. . (c) Obligation To pay withdrawal liability Section 4220(c) of the Employee Retirement Income Security Act of 1974 ( 29 U.S.C. 1399(c) ) is amended by adding at the end the following: (9) An employer shall be subject to an obligation to make payments of withdrawal liability under this section notwithstanding the commencement of a case under title 11, United States Code, with respect to the employer. . 3. Administrative expenses and priorities in bankruptcy proceedings (a) Allowance of administrative expenses (1) In general Section 503(b) of title 11, United States Code, is amended— (A) in paragraph (8)(B), by striking and ; (B) in paragraph (9), by striking the period at the end and inserting a semicolon; and (C) by adding at the end the following: (10) unpaid minimum required contributions, as defined in section 302(c)(4)(C)(iii)(I) of the Employee Retirement Income Security Act of 1974 ( 29 U.S.C. 1082(c)(4)(C)(iii)(I) ) and section 4971(c)(4) of the Internal Revenue Code of 1986; and (11) withdrawal liability determined under part 1 of subtitle E of title IV of the Employee Retirement Income Security Act of 1974 ( 29 U.S.C. 1381 et seq. ), including any accelerated payment of such withdrawal liability under section 4219(c)(5) of the Employee Retirement Income Security Act of 1974 ( 29 U.S.C. 1399(c)(5) ). . (2) Conforming amendment relating to priorities Section 507(a)(5) of title 11, United States Code, is amended, in the matter preceding subparagraph (A), by inserting after contributions to an employee benefit plan the following: , other than for unpaid minimum required contributions, as defined in section 302(c)(4)(C)(iii)(I) of the Employee Retirement Income Security Act of 1974 ( 29 U.S.C. 1082(c)(4)(C)(iii)(I) ) and section 4971(c)(4) of the Internal Revenue Code of 1986 . (b) Increased wage priority Section 507(a) of title 11, United States Code, is amended— (1) in paragraph (4), in the matter preceding subparagraph (A)— (A) by striking $10,000 and inserting $20,000 ; (B) by striking within 180 days ; and (C) by striking or the date of the cessation of the debtor’s business, whichever occurs first, ; and (2) in paragraph (5)— (A) in subparagraph (A)— (i) by striking within 180 days ; and (ii) by striking or the date of the cessation of the debtor’s business, whichever occurs first ; and (B) 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. . 4. Automatic stay in bankruptcy proceedings Section 362(b) of title 11, United States Code, is amended— (1) in paragraph (28), by striking and at the end; (2) in paragraph (29), by striking the period at the end and inserting ; and ; and (3) by inserting after paragraph (29) the following: (29) under subsection (a) of this section, the commencement or continuation of an action or proceeding by the Director of the Pension Benefits Guaranty Corporation to enforce the minimum standard under section 303(k) of the Employment Retirement Income Security Act of 1974 ( 29 U.S.C. 1083(k) ). . 5. Sales of property in bankruptcy proceedings (a) In general Section 363 of title 11, United States Code, is amended— (1) in subsection (b)(1), in the matter preceding subparagraph (A), by striking The trustee and inserting Subject to subsection (q), the trustee ; (2) in subsection (c)(1), by striking If the business and inserting Subject to subsection (q), if the business ; and (3) by adding at the end the following: (q) (1) Subject to paragraphs (2) and (3), the trustee may not sell property of the estate under subsection (b) or (c) unless the trustee is able to demonstrate that— (A) the sale complies with the provisions of this title; (B) the sale has been proposed in good faith and not by any means forbidden by the law; (C) any payment made for services or for costs and expenses in or in connection with the sale is reasonable; (D) if, with respect to the case, there is any fee payable under section 1930 of title 28, the proceeds of the sale will be used to pay that fee; and (E) with respect to each class of claims or interests— (i) such class has accepted the sale; or (ii) such class is not impaired by the sale. (2) The trustee, on request of the proponent of the sale, may sell property of the estate under subsection (b) or (c) if— (A) all of the applicable requirements of paragraph (1) other than subparagraph (E) are met with respect to a sale of property; and (B) the sale does not discriminate unfairly, and is fair and equitable, with respect to each class of claims or interests that is impaired under, and has not accepted, the sale. (3) The trustee may not sell substantially all of the property of the estate under subsection (b) or (c) during the 60-day period beginning on the date of the filing of the petition unless the court determines that— (A) there is a high likelihood that the value of the property of the estate will decrease significantly during that period; and (B) the requirements under paragraph (1) have been satisfied with respect to each sale that would contribute to substantially all of the property of the estate being sold. . (b) 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 offered to maintain existing jobs, preserve terms and conditions of employment, and assume or match pension and retiree health benefit obligations in determining whether an offer constitutes the highest or best offer for such property. . 6. Fraudulent transfers and obligations Section 548 of title 11, United States Code, is amended— (1) in subsection (a)(1), in the matter preceding subparagraph (A), by striking 2 years and inserting 6 years ; and (2) in subsection (b), by striking 2 years and inserting 6 years . 7. Limitations on executive compensation enhancements Section 503(c) of title 11, United States Code, is amended— (1) in paragraph (1), in the matter preceding subparagraph (A)— (A) by inserting , a senior executive officer, or any of the 20 next most highly compensated 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 of the commencement of the case, after remain with the debtor’s business, ; and (C) by inserting clear and convincing before evidence in the record ; and (2) by amending paragraph (3) to read as follows: (3) other transfers or obligations, to or for the benefit of insiders, senior executive officers, managers, or consultants providing services to the debtor, in the absence of a finding by the court, based upon clear and convincing evidence, and without deference 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 provided, and then only to the extent that the court finds such transfers or obligations are reasonable 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. . 8. Applicability This Act and the amendments made by this Act shall apply with respect to any case that is commenced on or after the date of enactment of this Act.