Govwatch

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 10942 Introduced in House (IH)]

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119th CONGRESS
  2d Session
                               H. R. 10942

   To amend title 11, United States Code, to prohibit the payment of 
 bonuses to highly compensated individuals employed by the debtor and 
insiders of the debtor to perform services during the bankruptcy case, 
                        and for other purposes.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                            October 29, 2026

 Ms. Scanlon introduced the following bill; which was referred to the 
                       Committee on the Judiciary

_______________________________________________________________________

                                 A BILL

 
   To amend title 11, United States Code, to prohibit the payment of 
 bonuses to highly compensated individuals employed by the debtor and 
insiders of the debtor to perform services during the bankruptcy case, 
                        and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``No Bonuses in Bankruptcy Act of 
2026''.

SEC. 2. AMENDMENTS.

    (a) Allowance of Administrative Expenses.--Section 503 of title 11, 
United States Code, is amended by adding at the end the following:
    ``(d)(1) Notwithstanding any other provision of this section, there 
shall neither be allowed nor paid a bonus to--
            ``(A) an individual employed by the debtor at an annual 
        rate of compensation exceeding $250,000;
            ``(B) an insider of the debtor; or
            ``(C) an individual employed by the debtor to the extent 
        that such bonus would cause that individual's annual rate of 
        compensation to exceed $250,000.
    ``(2) For purposes of this subsection, the term `bonus' means a 
transfer to, or obligation incurred for the benefit of, an individual 
employed by the debtor or insider of the debtor as compensation for 
services in an amount that--
            ``(A) is in addition to the existing wages, salary, or base 
        compensation of an insider of the debtor or individual employed 
        by the debtor; and
            ``(B) can be construed as a form of retention, incentive, 
        or reward related to the services provided to the debtor by the 
        insider or the individual employed by the debtor.
The term `bonus' does not include a sales commission. Nor does the term 
`bonus' include any transfer or obligation pursuant to the terms of a 
collective bargaining agreement.
    ``(3) The term `an individual employed by the debtor' includes, but 
is not limited to, an employee, consultant, or contractor.''.
    (b) Preferences.--Section 547 of title 11, United States Code, is 
amended by adding at end the following:
    ``(j) Notwithstanding any other provision of this section, the 
trustee may avoid any transfer of an interest of the debtor in property 
made within 180 days before the date of the filing of the petition if 
such transfer is the payment of a bonus of the kind that would be 
disallowed under subsection (c) or (d) of section 503.''.

SEC. 3. EFFECTIVE DATE; APPLICATION OF AMENDMENT.

    (a) Effective Date.--Except as provided in subsection (b), this Act 
and the amendments made by this Act shall take effect on the date of 
the enactment of this Act.
    (b) Application of Amendment.--The amendments made by this Act 
shall apply only with respect to cases commenced under title 11, United 
States Code, on or after the date of the enactment of this Act.
                                 <all>
No Bonuses in Bankruptcy Act of 2026

Full Text
