< Back to H.R. 5525 (107th Congress, 2001–2002)

Text of the Corporate Bankruptcy Abuse Prevention and Employee Protection Act of 2002

This bill was introduced on October 2, 2002, in a previous session of Congress, but was not enacted. The text of the bill below is as of Oct 2, 2002 (Introduced).

Source: GPO

HR 5525 IH

107th CONGRESS

2d Session

H. R. 5525

To amend title 11 of the United States Code to prevent corporate bankruptcy abuse and provide greater protection for employees, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

OCTOBER 2, 2002

Mr. GEKAS 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 prevent corporate bankruptcy abuse and provide greater protection for employees, 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 ‘Corporate Bankruptcy Abuse Prevention and Employee Protection Act of 2002’.

SEC. 2. EMPLOYEE WAGE AND BENEFIT PRIORITIES.

    Section 507(a) of title 11, United States Code, is amended--

      (1) in paragraph (3) by striking ‘90’ and inserting ‘180’, and

      (2) in paragraphs (3) and (4) by striking ‘$4,000’ and inserting ‘$10,000’.

SEC. 3. FRAUDULENT TRANSFERS AND OBLIGATIONS.

    Section 548 of title 11, United States Code, is amended--

      (1) in subsections (a) and (b) by striking ‘one year’ and inserting ‘2 years’,

      (2) in subsection (a)--

        (A) by inserting ‘(including any transfer to or for the benefit of an insider under an employment contract)’ after ‘transfer’ the 1st place it appears, and

        (B) by inserting ‘(including any obligation to or for the benefit of an insider under an employment contract)’ after ‘obligation’ the 1st place it appears, and

      (3) in subsection (a)(1)(B)(ii)--

        (A) in subclause (II) by striking ‘or’ at the end,

        (B) in subclause (III) by striking the period at the end and inserting ‘; or’, and

        (C) by adding at the end the following:

      ‘(IV) made such transfer to or for the benefit of an insider, or incurred such obligation to or for the benefit of an insider, under an employment contract and not in the ordinary course of business.’.

SEC. 4. PAYMENT OF INSURANCE BENEFITS TO RETIRED EMPLOYEES.

    Section 1114 of title 11, United States Code, is amended--

      (1) by redesignating subsection (l) as subsection (m), and

      (2) by inserting after subsection (k) the following:

    ‘(l) If the debtor, during the 180-day period ending on the date of the filing of the petition--

      ‘(1) modified retiree benefits; and

      ‘(2) was insolvent on the date such benefits were modified;

    the court, on motion of a party in interest, and after notice and a hearing, shall issue an order reinstating as of the date the modification was made, such benefits as in effect immediately before such date unless the court finds that the balance of the equities clearly favors such modification.’.

SEC. 5. EFFECTIVE DATE; APPLICATION OF AMENDMENTS.

    (a) EFFECTIVE DATE- Except as provided in subsection (b), this Act and the amendments made by this Act shall take effect on the date of the enactment of this Act.

    (b) APPLICATION OF AMENDMENTS-

      (1) IN GENERAL- Except as provided in paragraph (2), the amendments 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.

      (2) AVOIDANCE PERIOD- The amendment made by section 3(1) shall apply only with respect to cases commenced under title 11 of the United States Code more than 1 year after the date of the enactment of this Act.