Cohen Chairs Hearing on How to Protect Employees and Retirees in Business Bankruptcy

WASHINGTON, D.C. – Congressman Steve Cohen (D-TN-9), Chairman of the House Judiciary Subcommittee on Commercial and Administrative Law (CAL), today held a hearing on the “Protecting Employees and Retirees in Business Bankruptcies Act of 2010” (H.R. 4677) – a measure authored by House Judiciary Committee Chairman John Conyers, Jr. (D-MI-14).

“This past decade has shown us that employees and retirees bear the disproportionate brunt of sacrifices during the course of business bankruptcies,” said Congressman Cohen. “While Chapter 11’s purpose is to help struggling businesses reorganize into viable enterprises, it must not do so on the backs of workers and retirees, especially when executives of these bankrupt businesses often get obscenely large payments. The premise of bankruptcy is and should be 'shared pain, shared gain.'”

Chapter 11 is a chapter of the United States Bankruptcy code that enables reorganization under the bankruptcy laws of America and is available to businesses and individuals. The Conyers measure is intended to restore balance with respect to how employees and retirees are treated in Chapter 11 business bankruptcy cases.

The bill would increase economic recoveries by employees, restore balance and fairness to the process by which companies can reject or modify collective bargaining agreements and retiree benefits in bankruptcy, and ensure more equitable sacrifice by executives, insiders, and other highly compensated employees.