Amendment Numbered 3 printed in House Report 108-42 increases the monetary cap on wage and employee benefits claims entitled to priority under the Bankruptcy Code; increases the reachback period for wage claims and requires the court to reinstate retiree benefits that a corporate debtor modified within the six-month period prior to bankruptcy.

1. Adds TITLE __--PREVENTING CORPORATE BANKRUPTCY ABUSE at the end of the bill

   Adds a title

   Inserted: TITLE __--PREVENTING CORPORATE BANKRUPTCY ABUSE

   Inserted: SEC. __01. EMPLOYEE WAGE AND BENEFIT PRIORITIES.

   Inserted: Section 507(a) of title 11, United States Code, is amended--

   Inserted: (1) in paragraph (3) by striking "90" and inserting "180", and

   Inserted: (2) in paragraphs (3) and (4) by striking "$4,000" and inserting "$10,000".

   Inserted: SEC. __02. FRAUDULENT TRANSFERS AND OBLIGATIONS.

   Inserted: Section 548 of title 11, United States Code, is amended--

   Inserted: (1) in subsections (a) and (b) by striking "one year" and inserting "2 years",

   Inserted: (2) in subsection (a)--

   Inserted: (A) by inserting "(including any transfer to or for the benefit of an insider under an employment contract)" after "transfer" the 1st place it appears, and

   Inserted: (B) by inserting "(including any obligation to or for the benefit of an insider under an employment contract)" after "obligation" the 1st place it appears, and

   Inserted: (3) in subsection (a)(1)(B)(ii)--

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   Inserted: (A) in subclause (II) by striking "or" at the end,

   Inserted: (B) in subclause (III) by striking the period at the end and inserting "; or", and

   Inserted: (C) by adding at the end the following:

   Inserted: "(IV) made such transfer to or for the benefit of an insider, or incurred such obligation to or for the benefit of an insider, under an employment contract and not in the ordinary course of business.".

   Inserted: SEC. __03. PAYMENT OF INSURANCE BENEFITS TO RETIRED EMPLOYEES.

   Inserted: Section 1114 of title 11, United States Code, is amended--

   Inserted: (1) by redesignating subsection (l) as subsection (m), and

   Inserted: (2) by inserting after subsection (k) the following:

   Inserted: "(l) If the debtor, during the 180-day period ending on the date of the filing of the petition--

   Inserted: "(1) modified retiree benefits; and

   Inserted: "(2) was insolvent on the date such benefits were modified; the court, on motion of a party in interest, and after notice and a hearing, shall issue an order reinstating as of the date the modification was made, such benefits as in effect immediately before such date unless the court finds that the balance of the equities clearly favors such modification.".

   Inserted: SEC. __04. EFFECTIVE DATE; APPLICATION OF AMENDMENTS.

   Inserted: (a) 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.

   Inserted: (b) Application of Amendments.--

   Inserted: (1) In general.--Except as provided in paragraph (2), the amendments 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.

   Inserted: (2) Avoidance period.--The amendment made by section 3(1) shall apply only with respect to cases commenced under title 11 of the United States Code more than 1 year after the date of the enactment of this Act.

   Original wording

   Add at the end the following:

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As printed