Retiree Benefits Bankruptcy Protection Act of 1988
PL 100-334 (H.R.2969), enacted 06/16/1988

102 STAT. 610 
PUBLIC LAW 100-334—JUNE 16, 1988 
Public Law 100-334 
100th Congress 
An Act 
June 16, 1988 
[H.R. 2969] 
Retiree Benefits 
Btinkruptcy 
Protection Act 
of 1988. 
Courts, U.S. 
11 u s e 101 note. 
11 u s e 1114. 
To amend chapter 11 of title 11 of the United States Code to improve the treatment of 
claims for certain retiree benefits of former employees. 
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 "Retiree Benefits Bankruptcy Protec-
tion Act of 1988". 
SEC. 2. RETIREE BENEFITS. 
(a) BENEFITS.—Subchapter I of chapter 11 of title 11, United States 
Code, is amended by adding at the end thereof the following new 
section: 
*'§ 1114. Payment of insurance benefits to retired employees 
"(a) For purposes of this section, the term 'retiree benefits' means 
payments to any entity or person for the purpose of providing or 
reimbursing pa3mients for retired employees and their spouses and 
dependents, for medical, surgical, or hospital care benefits, or bene-
fits in the event of sickness, accident, disability, or death under any 
plan, fund, or program (through the purchase of insurance or other-
wise) maintained or established in whole or in part by the debtor 
prior to filing a petition commencing a case under this title. 
"(bXD For purposes of this section, the term 'authorized represent-
ative' means the authorized representative designated pursuant to 
subsection (c) for persons receiving any retiree benefits covered by a 
collective bargaining agreement or subsection (d) in the case of 
persons receiving retiree benefits not covered by such an agreement. 
"(2) Committees of retired employees appointed by the court 
pursuant to this section shall have the same rights, powers, and 
duties as committees appointed under sections 1102 and 1103 of this 
title for the purpose of carrying out the purposes of sections 1114 
and 1129(aX13) and, as permitted by the court, shall have the power 
to enforce the rights of persons under this title as they relate to 
retiree benefits. 
"(cXD A labor organization shall be, for purposes of this section, 
the authorized representative of those persons receiving any retiree 
benefits covered by any collective bargaining agreement to which 
that labor organization is signatory, unless (A) such labor organiza-
tion elects not to serve as the authorized representative of such 
persons, or (B) the court, upon a motion by any party in interest, 
after notice and hearing, determines that different representation of 
such persons is appropriate. 
"(2) In cases where the labor organization referred to in para-
graph (1) elects not to serve as the authorized representative of those 
persons receiving any retiree benefits covered by any collective 
bargaining agreement to which that labor organization is signatory, 
or in cases where the court, pursuant to paragraph (1) finds different 
PUBUC LAW 100-334-JUNE 16,1988 
102 STAT. 611 
representation of such persons appropriate, the court, upon a 
motion by any party in interest, and after notice and a hearing, 
shall appoint a committee of retired employees if the debtor seeks to 
modify or not pay the retiree benefits or if the court otherwise 
determines that it is appropriate, from among such persons, to serve 
as the authorized representative of such persons under this section. 
"(d) The court, upon a motion by any party in interest, and after 
notice and a hearing, shall appoint a committee of retired employees 
if the debtor seeks to modify or not pay the retiree benefits or if the 
court otherwise determines that it is appropriate, to serve as the 
authorized representative, under this section, of those persons 
receiving any retiree benefits not covered by a collective bargaining 
agreement. 
"(eXD Notwithstanding any other provision of this title, the 
debtor in possession, or the trustee if one has been appointed under 
the provisions of this chapter (hereinafter in this section 'trustee' 
shall include a debtor in possession), shall timely pay and shall not 
modify any retiree benefite, except that— 
"(A) the court, on motion of the trustee or authorized rep-
resentative, and after notice and a hearing, may order modifica-
tion of such payments, pursuant to the provisions of subsections 
(g) and (h) of this section, or 
"(B) the trustee and the authorized representetive of the 
* recipients of those benefits may agree to modification of such 
payments, 
after which such benefits as modified shall continue to be paid by 
the trustee. 
"(2) Any payment for retiree benefits required to be made before a 
plan confirmed under section 1129 of this title is effective has the 
status of an allowed administrative expense as provided in section 
503 of this title. 
"(fXl) Subsequent to filing a petition and prior to filing an applica-
tion seeking modification of the retiree benefits, the trustee shall— 
"(A) make a proposal to the authorized representative of the 
retirees, based on the most complete and reliable information 
' available at the time of such proposal, which provides for those 
necessary modifications in the retiree benefits that are nec-
essary to permit the reorganization of the debtor and assures 
that all creditors, the debtor and all of the affected parties are 
treated fairly and equitably; and 
"(B) provide, subject to subsection (kX3), the representative of 
the retirees with such relevant information as is necessary to 
evaluate the proposal. 
"(2) During the period beginning on the date of the making of a 
E
roposal provided for in paragraph (1), and ending on the date of the 
earing provided for in subsection (kXl)> the trustee shall meet, at 
reasonable times, with the autiborized representative to confer in 
good faith in attempting to reach mutually satisfactory modifica-
tions of such retiree benefits. 
"(g) The court shall enter an order providing for modification in 
the payment of retiree benefits if the court 
finds 
tliat— 
"(1) the trustee has, prior to the hearing, made a proposal 
that fulfills the requirements of subsection (0; 
"(2) the authorized representative of the retirees has refused 
to accept such pr^xMal without good cause; cuid 
"(3) such modification is necessary to permit the reorganiza-
tion of the debtor and assures that ail creditors, the debtor, and 
102 STAT. 612 
PUBLIC LAW 100-334—JUNE 16, 1988 
all of the affected parties are treated fairly and equitably, and is 
clearly favored by the balance of the equities; 
except that in no case shall the court enter an order providing for 
such modification which provides for a modification to a level lower 
than that proposed by the trustee in the proposal found by the court 
to have complied with the requirements of this subsection and 
subsection (f): Provided, however, That at any time after an order is 
entered providing for modification in the payment of retiree bene-
fits, or at any time after an agreement modifying such benefits is 
made between the trustee and the authorized representative of the 
recipients of such benefits, the authorized representative may apply 
to the court for an order increasing those benefits which order shall 
be granted if the increase in retiree benefits sought is consistent 
with the standard set forth in paragraph (3): Provided further. That 
neither the trustee nor the authorized representative is precluded 
from making more than one motion for a modification order gov-
erned by this subsection. 
"(hXl) Prior to a court issuing a final order under subsection (g) of 
this section, if essential to the continuation of the debtor's business, 
or in order to avoid irreparable damage to the estate, the court, after 
notice and a hearing, may authorize the trustee to implement 
interim modifications in retiree benefits. 
"(2) Any hearing under this subsection shall be scheduled in 
accordance with the needs of the trustee. 
"(3) The implementation of such interim changes does not render 
the motion for modification moot. 
"(i) No retiree benefits paid between the filing of the petition and 
the time a plan confirmed under section 1129 of this title becomes 
effective shall be deducted or offset from the amounts allowed as 
claims for any benefits which remain unpaid, or from the amounts 
to be paid under the plan with respect to such claims for unpaid 
benefits, whether such claims for unpaid benefits are based upon or 
arise from a right to future unpaid benefits or from any benefits not 
paid as a result of modifications allowed pursuant to this section. 
"(j) No claim for retiree benefits shall be limited by section 
502(bX7) of this title. 
"(kXl) Upon the filing of an application for modifying retiree 
benefits, the court shall schedule a hearing to be held not later than 
fourteen days after the date of the filing of such application. All 
interested parties may appear and be heard at such hearing. Ade-
quate notice shall be provided to such parties at least ten days 
before the date of such hearing. The court may extend the time for 
the commencement of such hearing for a period not exceeding seven 
days where the circumstances of the case, and the interests of 
justice 
require such extension, or for additional periods of time to which the 
trustee and the authorized representative agfree. 
"(2) The court shall rule on such application for modification 
within ninety days after the date of the commencement of the 
hearing. In the interests of justice, the court may extend such time 
for ruling for such additional period as the trustee and the au-
thorized representative may agree to. If the court does not rule on 
such application within ninety dajrs after the date of the commence-
ment of the hearing, or within such additional time as the trustee 
and the authorized representative may agree to, the trustee may 
implement the proposed modifications pending the ruling of the 
court on such application. 
PUBLIC LAW 100-334—JUNE 16, 1988 
102 STAT. 613 
"(3) The court may enter such protective orders, consistent with Classified 
the need of the authorized representative of the retirees to evaluate 
information. 
the trustee's proposal and the application for modification, as may 
be necessary to prevent disclosure of information provided to such 
representative where such disclosure could compromise the position 
of the debtor with respect to its competitors in the industry in which 
it is engaged. 
"G) This section shall not apply to any retiree, or the spouse or 
dependents of such retiree, if such retiree's gross income for the 
twelve months preceding the filing of the bankruptcy petition equals 
or exceeds $250,000, unless such retiree can demonstrate to the 
satisfaction of the court that he is unable to obtain health, medical, 
life, and disability coverage for himself, his spouse, and his depend-
ents who would otherwise be covered by the employer's insurance 
plan, comparable to the coverage provided by the employer on the 
day before the filing of a petition under this title.". 
(b) PLAN.—Section 1129 of title 11, United States Code, is amended 
by adding at the end of subsection (a) thereof the following: 
"(13) The plan provides for the continuation after its effective 
date of payment of all retiree benefits, as that term is defined in 
section 1114 of this title, at the level established pursuant to 
subsection (eXlXB) or (g) of section 1114 of this title, at any time 
prior to confirmation of the plan, for the duration of the period 
the debtor has obligated itself to provide such benefits.". 
(c) TECHNICAL AMENDMENT.—The table of sections for subchapter 
I of chapter 11, title 11, United States Code, is amended by adding at 
the end thereof the following new item: 
"1114. Payment of insurance benefits to retired employees.". 
SEC. 3. CONFORMING AMENDMENTS. 
(a) PuBuc LAW 99-591.—(1) Section 608(a) of the second title VI of ii use 1106 
the joint resolution entitled "Joint resolution making continuing 
appropriations for the fiscal year 1987, and for other purposes', 
approved October 30,1986 (Public Law 99-591; 100 Stat. 3341-74), is 
amended— 
(A) by striking "Notwithstanding" and all that follows 
through "Code" and inserting "(1) Subject to paragraphs (2), (3), 
(4), and (5), and notwithstanding title 11 of the United States 
Code", 
(B) by striking "until" and all that follows through "1987"; 
and 
(C) by adding at the end thereof the following: 
"(2) The level of benefits required to be paid by this subsection 
may be modified prior to confirmation of a plan imder section 1129 
of such title i
f
— 
"(A) the trustee and an authorized representative of the 
former employees with respect to whom such benefits are pay-
able agree to the modification of such benefit payments; or 
"(B) the court finds that a modification proposed by the 
trustee meets the standards of section 1113(bXlXA) of such title 
and the balance of the equities clearly favors the modification. 
If such benefits are covered by a collective bargaining agreement, 
the authorized representative shall be the labor organization that is 
signatory to such collective bargaining (Agreement unless there is a 
conflict of interest. 
"(3) The trustee shall pay benefits in accordance with this subsec-
tion until— 
note. 
102 STAT. 614 
PUBLIC LAW 100-334—JUNE 16, 1988 
"(A) the dismissal of the case involved; or 
"(B) the effective date of a plan confirmed under section 1129 
of such title which provides for the continued payment after 
confirmation of the plan of all such benefits at the level estab-
lished under paragraph (2) of this subsection, at any time prior 
to the confirmation of the plan, for the duration of the period 
the debtor (as defined in such title) has obligated itself to 
provide such benefits. 
"(4) No such benefits paid between the filing of a petition in a case 
covered by this section and the time a plan confirmed under section 
1129 of such title with respect to such case becomes effective shall be 
deducted or offset from the amount allowed as claims for any 
benefits which remain unpaid, or from the amount to be paid under 
the plan with respect to such claims for unpaid benefits, whether 
such claims for unpaid benefits are based upon or arise from a right 
to future benefits or from any benefit not paid as a result of 
modifications allowed pursuant to this section. 
"(5) No claim for benefits covered by this section shall be limited 
by section 502(b)(7) of such title.". 
(2) Section 608(b) of the second title VI of the joint resolution 
entitled "Joint resolution making continuing appropriations for the 
fiscal year 1987, and for other purposes", approved October 30, 1986 
11 use 1106 
(Public Law 99-591; 100 Stat. 3341-74), is amended by inserting 
^°^- 
before the period the following: "and before the date of the enact-
ment of the Retiree Benefits Bankruptcy Protection Act of 1988". 
(3) Section 608 of the second title VI of the joint resolution entitled 
"Joint resolution making continuing appropriations for the fiscal 
year 1987, and for other purposes", approved October 30, 1986 
(Public Law 99-591; 100 Stat. 3341-74), is amended— 
(A) by redesignating subsections (b) and (c) as subsections (c) 
and (d), respectively, and 
(B) by adding at the end the following: 
"(b)(1) Notwithstanding any provision of title 11 of the United 
States Code, the trustee shall pay an allowable claim of any person 
for a benefit paid— 
"(A) before the filing of the petition under title 11 of the 
United States Code; and 
"(B) directly or indirectly to a retired former employee under 
a plan, fund, or program described in subsection (aXD; 
if, as determined by the court, such person is entitled to recover 
from such employee, or any provider of health care to such em-
ployee, directly or indirectly, the amount of such benefit for which 
such person receives no payment from the debtor. 
"(2) For purposes of paragraph (1), the term 'provider of health 
care' means a person who— 
"(A) is the direct provider of health care (including a physi-
cian, dentist, nurse, podiatrist, optometrist, physician assistant, 
or ancillary personnel employed under the supervision of a 
physician); or 
"(B) administers a facility or institution (including a hospital, 
alcohol and drug abuse treatment facility, outpatient facility, or 
health maintenance organization) in which health care is 
provided.". 
(b) PuBUC LAW 99-656.—Section 2 of the Act entitled "An Act to 
amend the interest provisions of the Declaration of Taking Act", 
11 use 1106 
approved November 14,1986 (Public Law 99-656), is repealed. 
note. 
PUBLIC LAW 100-334—JUNE 16, 1988 
102 STAT. 615 
SEC. 4. EFFECTIVE DATE; APPLICATION OF AMENDMENTS. 
11 USC1114 
(a) GENERAL EFFECTIVE DATE.—Except as provided in subsection 
(b), this Act and the amendments made by this Act shall take effect 
on the date of the enactment of this Act. 
(b) APPUCATION OF AMENDMENTS.—The amendments made by 
section 2 shall not apply with respect to cases commenced under 
title 11 of the United States Code before the date of the enactment of 
this Act, 
Approved June 16, 1988. 
LEGISLATIVE HISTORY—H.R. 2969 (S. 548): 
HOUSE REPORTS: 100-119 accompanying S. 548 (Comm. on the Judiciary). 
CONGRESSIONAL RECORD: 
Vol. 133 (1987): July 24, S. 548 considered and passed Senate. 
Oct. 13, H.R. 2969 considered and passed House. 
Oct. 30, considered and passed Senate, amended. 
Vol. 134 (1988): May 23, House concurred in Senate amendment with an amend-
ment. 
May 26, Senate concurred in House amendment.