No Bonuses Ahead of Bankruptcy Filing Act of 2021

I 117TH CONGRESS 1ST SESSION H. R. 428 To amend title 11 of the United States Code to prohibit the payment of bonuses to highly compensated individuals employed by the debtor and insiders of the debtor to perform services during the bankruptcy case, and for other purposes. IN THE HOUSE OF REPRESENTATIVES JANUARY 21, 2021 Mr. STEUBE introduced the following bill; which was referred to the Committee on the Judiciary A BILL To amend title 11 of the United States Code to prohibit the payment of bonuses to highly compensated individ- uals employed by the debtor 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 Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘No Bonuses Ahead 4 of Bankruptcy Filing Act of 2021’’. 5 VerDate Sep 11 2014 17:28 Feb 12, 2021 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H428.IH H428 pamtmann on DSKBC07HB2PROD with BILLS 2 •HR 428 IH SEC. 2. AMENDMENT. 1 Section 503 of title 11 of the United States Code is 2 amended by adding at the end the following: 3 ‘‘(d)(1) During the 2-year period ending 1 year after 4 the date of the filing of the petition and notwithstanding 5 any other provision of this section, there shall neither be 6 allowed nor paid a bonus to— 7 ‘‘(A) an individual employed by the debtor at an 8 annual rate of compensation exceeding $250,000; 9 ‘‘(B) an insider of the debtor; or 10 ‘‘(C) an individual employed by the debtor to 11 the extent that such bonus would cause that individ- 12 ual’s annual rate of compensation to exceed 13 $250,000. 14 ‘‘(2) For purposes of this subsection, the term ‘bonus’ 15 means a transfer to, or obligation incurred for the benefit 16 of, an individual employed by the debtor or insider of the 17 debtor as compensation for services in an amount that— 18 ‘‘(A) is in addition to the existing wages, salary, 19 or base compensation of an insider of the debtor or 20 individual employed by the debtor; and 21 ‘‘(B) can be construed as a form of retention, 22 incentive, or reward related to the services provided 23 to the debtor by the insider or the individual em- 24 ployed by the debtor. 25 VerDate Sep 11 2014 17:28 Feb 12, 2021 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H428.IH H428 pamtmann on DSKBC07HB2PROD with BILLS 3 •HR 428 IH The term ‘bonus’ does not include a sales commission. Nor 1 does the term ‘bonus’ include any transfer or obligation 2 pursuant to the terms of a collective bargaining agree- 3 ment. 4 ‘‘(3) The term ‘an individual employed by the debtor’ 5 includes, but is not limited to, an employee, consultant, 6 or contractor.’’. 7 SEC. 3. EFFECTIVE DATE; APPLICATION OF AMENDMENT. 8 (a) EFFECTIVE DATE.—Except as provided in sub- 9 section (b), this Act and the amendment made by this Act 10 shall take effect on the date of the enactment of this Act. 11 (b) APPLICATION OF AMENDMENT.—The amendment 12 made by this Act shall apply only with respect to cases 13 commenced under title 11 of the United States Code on 14 or after the date of the enactment of this Act. 15 Æ VerDate Sep 11 2014 17:28 Feb 12, 2021 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6301 E:\BILLS\H428.IH H428 pamtmann on DSKBC07HB2PROD with BILLS