ContractsProf Blog

Editor: Myanna Dellinger
University of South Dakota School of Law

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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