May 23, 2005
Bankruptcy Act limits executive benefits
One aspect of the new Bankruptcy Act that didn’t get much air time is a provision that restricts the ability of trustees to make big payments to company execs to keep them aboard during a reorganization. Under the new act, say Joseph Adams, Jennifer Miani and Karen Simonsen of McDermott Will & Emery in a new client advisory, there are new guidelines that, among other things, prohibit such payments unless the individual already has a bona fide job offer at the same or higher salary.
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