No Bonuses in Bankruptcy Act of 2018

No Bonuses in Bankruptcy Act of 2018

This bill prohibits the payment of bonuses to certain highly compensated employees and other insiders of a debtor for services performed during chapter 11 (reorganization) bankruptcy proceedings.

[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[H.R. 6912 Introduced in House (IH)]

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115th CONGRESS
  2d Session
                                H. R. 6912

To amend title 11 of the United States Code to prohibit the payment of 
 bonuses to highly compensated employees and insiders of the debtor to 
  perform services during the bankruptcy case; and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           September 26, 2018

   Mr. Duncan of Tennessee introduced the following bill; which was 
               referred to the Committee on the Judiciary

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                                 A BILL


 
To amend title 11 of the United States Code to prohibit the payment of 
 bonuses to highly compensated employees and insiders of the debtor to 
  perform services during the bankruptcy case; 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 ``No Bonuses in Bankruptcy Act of 
2018''.

SEC. 2. AMENDMENTS.

    Title 11 of the United States Code is amended--
            (1) in section 503 by adding at the end the following:
    ``(d)(1) Notwithstanding any other provision of this section, there 
shall neither be allowed nor paid a bonus to--
            ``(A) a person employed at an annual rate of compensation 
        exceeding $250,000 by the debtor at any time in the year ending 
        on the date of the filing of the petition; or
            ``(B) an insider of the debtor.
    ``(2) For purposes of this subsection, the term `bonus' means a 
transfer to, or obligation incurred for the benefit of, an employee or 
insider as compensation for services in an amount that--
            ``(A) is in addition to the existing employee's or 
        insider's wages or salary;
            ``(B) is in addition to existing base compensation of the 
        employee or insider; or
            ``(C) can be construed as a form of retention, incentive, 
        or reward related to the employee's or insider's employment by 
        the debtor.'';
            (2) in section 547(b)(4)(B) by striking ``insider'' and 
        inserting ``an employee employed at an annual rate of 
        compensation exceeding $250,000 by the debtor at any time in 
        the year ending on the date of the filing of the petition or an 
        insider of the debtor''; and
            (3) in section 548(a)(1)--
                    (A) in the matter preceding subparagraph (A) by 
                inserting ``a person employed at an annual rate of 
                compensation exceeding $250,000 by the debtor at any 
                time in the 2-year period ending on the date of the 
                filing of the petition or'' after ``benefit of'' each 
                place it appears; and
                    (B) in subparagraph (B)(IV) by inserting ``a person 
                employed at an annual rate of compensation exceeding 
                $250,000 by the debtor at any time in the 2-year period 
                ending on the date of the filing of the petition or'' 
                after ``benefit of''.

SEC. 3. EFFECTIVE DATE; APPLICATION OF AMENDMENT.

    (a) Effective Date.--Except as provided in subsection (b), this Act 
and the amendment made by this Act shall take effect on the date of the 
enactment of this Act.
    (b) Application of Amendment.--The amendment 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.
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