Protecting Employees and Retirees in Business Bankruptcies Act of 2020
This bill modifies provisions related to Chapter 11 bankruptcy, which typically involves the reorganization of a debtor company's assets and debts. Specifically, the bill (1) expands available claims and priorities for employees and retirees, and (2) places additional restrictions on the compensation of executives and other high level employees.
With respect to employee and retiree recoveries and losses, the bill
- increases the maximum value and age of specified wage and benefit claims entitled to priority payment;
- allows certain claims for losses related to defined contribution plans, if the employer or plan sponsor has committed fraud or otherwise breached its fiduciary duty;
- allows, as an administrative expense of the estate, severance pay owed to employees and contributions to an employee benefit plan;
- establishes certain restrictions regarding the rejection or amendment of a collective bargaining agreement;
- revises specified procedures related to the reduction or denial of retiree benefits;
- requires a court, in approving a sale of business assets, to consider the extent to which a bidder has offered to maintain existing jobs and assume benefit obligations; and
- allows claims related to pension losses.
With respect to executive compensation, the bill
- establishes specified limitations related to executive compensation enhancements,
- prohibits executives from receiving certain retiree benefits if such benefits were reduced or eliminated for other employees or retirees, and
revises other requirements related to court approval of such compensation.