No Bonuses for High-Paid Staff in Bankrupt Companies
This law aims to prevent high-paid employees and company insiders from receiving bonuses when a company declares bankruptcy. This measure helps protect the company's assets during financial distress, potentially increasing the chances for creditors, including small businesses and individuals, to recover their funds.
Key points
Companies in bankruptcy cannot pay bonuses to individuals earning over $250,000 annually.
The ban also applies to bonuses for company insiders (e.g., owners, directors), regardless of their earnings.
The law allows for the recovery of bonuses paid up to 180 days before bankruptcy filing if they would have been prohibited under the new rules.
Sales commissions and benefits from collective bargaining agreements are exempt from the bonus ban.
Expired
Citizen Poll