ContractsProf Blog

Editor: D. A. Jeremy Telman
Valparaiso Univ. Law School

Monday, 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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