H. R. 428
IN THE HOUSE OF REPRESENTATIVES
January 21, 2021
Mr. Steube introduced the following bill; which was referred to the Committee on the Judiciary
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.
This Act may be cited as the
No Bonuses Ahead of Bankruptcy Filing Act of 2021.
Section 503 of title 11 of the United States Code is amended by adding at the end the following:
During the 2-year period ending 1 year after the date of the filing of the petition and notwithstanding any other provision of this section, there shall neither be allowed nor paid a bonus to—
an individual employed by the debtor at an annual rate of compensation exceeding $250,000;
an insider of the debtor; or
an individual employed by the debtor to the extent that such bonus would cause that individual’s annual rate of compensation to exceed $250,000.
For purposes of this subsection, the term bonus means a transfer to, or obligation incurred for the benefit of, an individual employed by the debtor or insider of the debtor as compensation for services in an amount that—
is in addition to the existing wages, salary, or base compensation of an insider of the debtor or individual employed by the debtor; and
can be construed as a form of retention, incentive, or reward related to the services provided to the debtor by the insider or the individual employed by the debtor.
The term an individual employed by the debtor includes, but is not limited to, an employee, consultant, or contractor.
Effective date; application of amendment
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.
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.