H.R. 7370, the Protecting Employees and Retirees in Business Bankruptcies Act of 2020, has been introduced by Rep. Jerrold Nadler (D-NY). This bill would modify provisions related to Chapter 11 bankruptcy, including expanding claims and priorities for payment of benefits for employees and retirees, and protections related to reduction or denial of benefits.
Specifically, H.R. 7370 would do the following
- increase the avenues by which retirement and employee health and welfare benefit plans could be funded after the filing of bankruptcy;
- discourage the reduction or elimination of employee benefit and retirement plans by employers in bankruptcy;
- allow those who hold employee stock in a retirement plan to potentially recover losses caused by fraud or breach of fiduciary duty; and
- prevent employers from later rewarding insiders, executives, and highly paid employees if employee benefits are reduced in bankruptcy.
H.R. 7370 currently resides with the House Committee on the Judiciary, which has held a mark-up session on the bill.