[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[S. 1970 Introduced in Senate (IS)]
108th CONGRESS
1st Session
S. 1970
To amend title 11, United States Code, to increase the amount of
unsecured claims for salaries and wages given priority in bankruptcy,
to provide for cash payments to retirees to compensate for lost health
insurance benefits resulting from the bankruptcy of their former
employer, and for other purposes.
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IN THE SENATE OF THE UNITED STATES
November 25, 2003
Mr. Rockefeller introduced the following bill; which was read twice and
referred to the Committee on the Judiciary
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A BILL
To amend title 11, United States Code, to increase the amount of
unsecured claims for salaries and wages given priority in bankruptcy,
to provide for cash payments to retirees to compensate for lost health
insurance benefits resulting from the bankruptcy of their former
employer, and for other purposes.
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 ``Bankruptcy Fairness Act''.
SEC. 2. FAIR TREATMENT OF COMPENSATION IN BANKRUPTCY.
(a) Increased Priority Claim Amount for Employee Wages and
Benefits.--Section 507(a) of title 11, United States Code, is amended--
(1) in paragraph (3)--
(A) by striking ``$4,650'' and inserting
``$15,000''; and
(B) by striking ``within 90 days''; and
(2) in paragraph (4), by striking ``$4,650'' and inserting
``$15,000''.
(b) Recovery of Excessive Compensation.--Section 547 of title 11,
United States Code, is amended by adding at the end the following:
``(h) The court, on motion of a party of interest, may avoid any
transfer of compensation made to a present or former employee, officer,
or member of the board of directors of the debtor on or within 90 days
before the date of the filing of the petition that the court finds,
after notice and a hearing, to be--
``(1) out of the ordinary course of business; or
``(2) unjust enrichment.''.
SEC. 3. PAYMENT OF INSURANCE BENEFITS OF RETIREES.
(a) In General.--Section 1114(j) of title 11, United States Code,
is amended to read as follows:
``(j)(1) No claim for retiree benefits shall be limited by section
502(b)(7).
``(2)(A) Each retiree whose benefits are modified pursuant to
subsection (e)(1) or (g) shall have a claim in an amount equal to the
value of the benefits lost as a result of such modification. Such claim
shall be reduced by the amount paid by the debtor under subparagraph
(B).
``(B)(i) In accordance with section 1129(a)(13)(B), the debtor
shall pay the retiree with a claim under subparagraph (A) an amount
equal to the cost of 18 months of premiums on behalf of the retiree and
the dependents of the retiree under section 602(3) of the Employee
Retirement Income Security Act of 1974 (29 U.S.C. 1162(3)), which
amount shall not exceed the amount of the claim under subparagraph (A).
``(ii) If a retiree under clause (i) is not eligible for
continuation coverage (as defined in section 602 of the Employee
Retirement Income Security Act of 1974), the Secretary of Labor shall
determine the amount to be paid by the debtor to the retiree based on
the 18-month cost of a comparable health insurance plan.
``(C) Any amount of the claim under subparagraph (A) that is not
paid under subparagraph (B) shall be a general unsecured claim.''.
(b) Confirmation of Plan.--Section 1129(a)(13) of title 11, United
States Code, is amended to read as follows:
``(13) The plan provides--
``(A) for the continuation after its effective date
of the payment of all retiree benefits (as defined in
section 1114), at the level established pursuant to
subsection (e)(1) or (g) of section 1114, at any time
before the confirmation of the plan, for the duration
of the period the debtor has obligated itself to
provide such benefits; and
``(B) that the holder of a claim under section
1114(j)(2)(A) shall receive from the debtor, on the
effective date of the plan, cash equal to the amount
calculated under section 1114(j)(2)(B).
(c) Rulemaking.--The Secretary of Labor shall promulgate rules and
regulations to carry out the amendments made by this section.
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