[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[S. 2901 Introduced in Senate (IS)]







107th CONGRESS
  2d Session
                                S. 2901

     To provide that bonuses and other extraordinary or excessive 
 compensation of corporate insiders and wrongdoers may be included in 
                         the bankruptcy estate.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           September 3, 2002

 Mr. Grassley introduced the following bill; which was read twice and 
               referred to the Committee on the Judiciary

_______________________________________________________________________

                                 A BILL


 
     To provide that bonuses and other extraordinary or excessive 
 compensation of corporate insiders and wrongdoers may be included in 
                         the bankruptcy estate.

    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 ``Corporate Accountability in 
Bankruptcy Act''.

SEC. 2. BANKRUPTCY PROVISIONS.

    (a) Preferences.--Section 547 of title 11, United States Code, is 
amended by adding at the end the following:
    ``(h) A trustee may avoid any transfer made within 1 year before 
the date of the filing of the petition that was made to an insider, 
officer, or director for any bonuses, loans, nonqualified deferred 
compensation, or other extraordinary or excessive compensation as 
determined by the court.''.
    (b) Fraudulent Transfers and Obligations.--Section 548(a) of title 
11, United States Code, is amended by adding at the end the following:
    ``(3) The trustee may avoid any transfer of an interest of the 
debtor in property, or any obligation incurred by the debtor, including 
any bonuses, loans, nonqualified deferred compensation, or other 
extraordinary or excessive compensation as determined by the court, 
paid to any officer, director, or employee of an issuer of securities 
(as defined in section 2(a) of the Public Company Accounting Reform and 
Investor Protection Act of 2002), if--
            ``(A) that transfer of interest or obligation was made or 
        incurred on or within 4 years before the date of the filing of 
        the petition; and
            ``(B) the officer, director, or employee committed--
                    ``(i) a violation of the Federal securities laws 
                (as defined in section 3(a)(47) of the Securities 
                Exchange Act of 1934), State securities laws, or any 
                regulation or order issued under Federal or State 
                securities laws;
                    ``(ii) fraud, deceit, or manipulation in a 
                fiduciary capacity or in connection with the purchase 
                or sale of any security registered under section 12 or 
                15(d) of the Securities Exchange Act of 1934 or under 
                section 6 of the Securities Act of 1933; or
                    ``(iii) illegal or deceptive accounting 
                practices.''.
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