Bills Proposed to Change Corporate Bankruptcy Laws

Bills recently introduced in both houses of Congress would amend corporate
bankruptcy laws to favor workers and retirees. The Protecting Employees and
Retirees in Business Bankruptcy Act, proposed in the Senate by Majority Whip
Dick Durbin (D-IL), would increase the value of worker claims in bankruptcy
cases, curb the declaring company’s ability to change or reject collective
bargaining agreements and increase the parity of worker and executive
claims.

"American workers and retirees who give their lives to a company are treated
like strangers when their employer files bankruptcy," Durbin said. "This bill
says that if a company goes bankrupt, employees won’t take a back seat to
creditors and executive bonuses."

Specifically, the Senate bill would double the maximum value of wage claims
for each worker to $20,000 and establish a new priority administrative expense
for workers’ collective severance pay, toughen the procedures through which
retiree benefits can be reduced and prohibit deferred executive compensation if
employee compensation plans have been terminated in bankruptcy.

House Judiciary Committee Chairman introduced a companion bill. The bill has
been endorsed by the AFL-CIO and by a number of other individual
unions.
Jacob Barron, NACM staff writer

Leave a Reply

Your email address will not be published. Required fields are marked *