[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.


_______________________________________________________________________


                   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

_______________________________________________________________________

                                 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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