Bankruptcy Forms: Filing Bankruptcy Chapter 7 Bankruptcy Software Chapter 13

The Center For Debt Management
Center4DebtManagement.com ... Always open 24 / 7

Note: For affordable legal assistance The Center For Debt Management highly recommends Standard Legal's Do-It-Yourself Bankruptcy Forms Software Kits. For credit repair services,
the most trusted law firm in America with over 15 years of experience is Lexington Law Firm.

For more bankruptcy help and bankruptcy alternatives, go to Bankruptcy Resources



TITLE 11–BANKRUPTCY

CHAPTER 11– REORGANIZATION

Sub Chapter – Officers and Administration

Sec. 1114. Payment of insurance benefits to retired employees


    (a) For purposes of this section, the term ``retiree benefits'' 
means payments to any entity or person for the purpose of providing or 
reimbursing payments for retired employees and their spouses and 
dependents, for medical, surgical, or hospital care benefits, or 
benefits in the event of sickness, accident, disability, or death under 
any plan, fund, or program (through the purchase of insurance or 
otherwise) maintained or established in whole or in part by the debtor 
prior to filing a petition commencing a case under this title.
    (b)(1) For purposes of this section, the term ``authorized 
representative'' means the authorized representative designated pursuant 
to subsection (c) for persons receiving any retiree benefits covered by 
a collective bargaining agreement or subsection (d) in the case of 
persons receiving retiree benefits not covered by such an agreement.
    (2) Committees of retired employees appointed by the court pursuant 
to this section shall have the same rights, powers, and duties as 
committees appointed under sections 1102 and 1103 of this title for the 
purpose of carrying out the purposes of sections 1114 and 1129(a)(13) 
and, as permitted by the court, shall have the power to enforce the 
rights of persons under this title as they relate to retiree benefits.
    (c)(1) A labor organization shall be, for purposes of this section, 
the authorized representative of those persons receiving any retiree 
benefits covered by any collective bargaining agreement to which that 
labor organization is signatory, unless (A) such labor organization 
elects not to serve as the authorized representative of such persons, or 
(B) the court, upon a motion by any party in interest, after notice and 
hearing, determines that different representation of such persons is 
appropriate.
    (2) In cases where the labor organization referred to in paragraph 
(1) elects not to serve as the authorized representative of those 
persons receiving any retiree benefits covered by any collective 
bargaining agreement to which that labor organization is signatory, or 
in cases where the court, pursuant to paragraph (1) finds different 
representation of such persons appropriate, the court, upon a motion by 
any party in interest, and after notice and a hearing, shall appoint a 
committee of retired employees if the debtor seeks to modify or not pay 
the retiree benefits or if the court otherwise determines that it is 
appropriate, from among such persons, to serve as the authorized 
representative of such persons under this section.
    (d) The court, upon a motion by any party in interest, and after 
notice and a hearing, shall appoint a committee of retired employees if 
the debtor seeks to modify or not pay the retiree benefits or if the 
court otherwise determines that it is appropriate, to serve as the 
authorized representative, under this section, of those persons 
receiving any retiree benefits not covered by a collective bargaining 
agreement.
    (e)(1) Notwithstanding any other provision of this title, the debtor 
in possession, or the trustee if one has been appointed under the 
provisions of this chapter (hereinafter in this section ``trustee'' 
shall include a debtor in possession), shall timely pay and shall not 
modify any retiree benefits, except that--
        (A) the court, on motion of the trustee or authorized 
    representative, and after notice and a hearing, may order 
    modification of such payments, pursuant to the provisions of 
    subsections (g) and (h) of this section, or
        (B) the trustee and the authorized representative of the 
    recipients of those benefits may agree to modification of such 
    payments,

after which such benefits as modified shall continue to be paid by the 
trustee.
    (2) Any payment for retiree benefits required to be made before a 
plan confirmed under section 1129 of this title is effective has the 
status of an allowed administrative expense as provided in section 503 
of this title.
    (f)(1) Subsequent to filing a petition and prior to filing an 
application seeking modification of the retiree benefits, the trustee 
shall--
        (A) make a proposal to the authorized representative of the 
    retirees, based on the most complete and reliable information 
    available at the time of such proposal, which provides for those 
    necessary modifications in the retiree benefits that are necessary 
    to permit the reorganization of the debtor and assures that all 
    creditors, the debtor and all of the affected parties are treated 
    fairly and equitably; and
        (B) provide, subject to subsection (k)(3), the representative of 
    the retirees with such relevant information as is necessary to 
    evaluate the proposal.

    (2) During the period beginning on the date of the making of a 
proposal provided for in paragraph (1), and ending on the date of the 
hearing provided for in subsection (k)(1), the trustee shall meet, at 
reasonable times, with the authorized representative to confer in good 
faith in attempting to reach mutually satisfactory modifications of such 
retiree benefits.
    (g) The court shall enter an order providing for modification in the 
payment of retiree benefits if the court finds that--
        (1) the trustee has, prior to the hearing, made a proposal that 
    fulfills the requirements of subsection (f);
        (2) the authorized representative of the retirees has refused to 
    accept such proposal without good cause; and
        (3) such modification is necessary to permit the reorganization 
    of the debtor and assures that all creditors, the debtor, and all of 
    the affected parties are treated fairly and equitably, and is 
    clearly favored by the balance of the equities;

except that in no case shall the court enter an order providing for such 
modification which provides for a modification to a level lower than 
that proposed by the trustee in the proposal found by the court to have 
complied with the requirements of this subsection and subsection (f): 
Provided, however, That at any time after an order is entered providing 
for modification in the payment of retiree benefits, or at any time 
after an agreement modifying such benefits is made between the trustee 
and the authorized representative of the recipients of such benefits, 
the authorized representative may apply to the court for an order 
increasing those benefits which order shall be granted if the increase 
in retiree benefits sought is consistent with the standard set forth in 
paragraph (3): Provided further, That neither the trustee nor the 
authorized representative is precluded from making more than one motion 
for a modification order governed by this subsection.
    (h)(1) Prior to a court issuing a final order under subsection (g) 
of this section, if essential to the continuation of the debtor's 
business, or in order to avoid irreparable damage to the estate, the 
court, after notice and a hearing, may authorize the trustee to 
implement interim modifications in retiree benefits.
    (2) Any hearing under this subsection shall be scheduled in 
accordance with the needs of the trustee.
    (3) The implementation of such interim changes does not render the 
motion for modification moot.
    (i) No retiree benefits paid between the filing of the petition and 
the time a plan confirmed under section 1129 of this title becomes 
effective shall be deducted or offset from the amounts allowed as claims 
for any benefits which remain unpaid, or from the amounts to be paid 
under the plan with respect to such claims for unpaid benefits, whether 
such claims for unpaid benefits are based upon or arise from a right to 
future unpaid benefits or from any benefits not paid as a result of 
modifications allowed pursuant to this section.
    (j) No claim for retiree benefits shall be limited by section 
502(b)(7) of this title.
    (k)(1) Upon the filing of an application for modifying retiree 
benefits, the court shall schedule a hearing to be held not later than 
fourteen days after the date of the filing of such application. All 
interested parties may appear and be heard at such hearing. Adequate 
notice shall be provided to such parties at least ten days before the 
date of such hearing. The court may extend the time for the commencement 
of such hearing for a period not exceeding seven days where the 
circumstances of the case, and the interests of justice require such 
extension, or for additional periods of time to which the trustee and 
the authorized representative agree.
    (2) The court shall rule on such application for modification within 
ninety days after the date of the commencement of the hearing. In the 
interests of justice, the court may extend such time for ruling for such 
additional period as the trustee and the authorized representative may 
agree to. If the court does not rule on such application within ninety 
days after the date of the commencement of the hearing, or within such 
additional time as the trustee and the authorized representative may 
agree to, the trustee may implement the proposed modifications pending 
the ruling of the court on such application.
    (3) The court may enter such protective orders, consistent with the 
need of the authorized representative of the retirees to evaluate the 
trustee's proposal and the application for modification, as may be 
necessary to prevent disclosure of information provided to such 
representative where such disclosure could compromise the position of 
the debtor with respect to its competitors in the industry in which it 
is engaged.
    (l) This section shall not apply to any retiree, or the spouse or 
dependents of such retiree, if such retiree's gross income for the 
twelve months preceding the filing of the bankruptcy petition equals or 
exceeds $250,000, unless such retiree can demonstrate to the 
satisfaction of the court that he is unable to obtain health, medical, 
life, and disability coverage for himself, his spouse, and his 
dependents who would otherwise be covered by the employer's insurance 
plan, comparable to the coverage provided by the employer on the day 
before the filing of a petition under this title.

(Added Pub. L. 100-334, Sec. 2(a), June 16, 1988, 102 Stat. 610.)


                             Effective Date

    Section 4 of Pub. L. 100-334 provided that:
    ``(a) General Effective Date.--Except as provided in subsection (b), 
this Act and the amendments made by this Act [enacting this section, 
amending section 1129 of this title, enacting provisions set out as a 
note under section 101 of this title, and amending and repealing 
provisions set out as notes under section 1106 of this title] shall take 
effect on the date of the enactment of this Act [June 16, 1988].
    ``(b) Application of Amendments.--The amendments made by section 2 
[enacting this section and amending section 1129 of this title] shall 
not apply with respect to cases commenced under title 11 of the United 
States Code before the date of the enactment of this Act [June 16, 
1988].''


         Payment of Certain Benefits to Retired Former Employees

    For payment of benefits by bankruptcy trustee to retired employees 
in enumerated circumstances with respect to cases commenced under this 
chapter in which a plan for reorganization had not been confirmed by the 
court and in which any such benefit was still being paid on October 2, 
1986, and in cases that became subject to this chapter after October 2, 
1986, and before June 16, 1988, see section 101(b) [title VI, Sec. 608] 
of Pub. L. 99-500, and Pub. L. 99-591, as amended, set out as a note 
under section 1106 of this title.

                  Section Referred to in Other Sections

    This section is referred to in section 1129 of this title.

Back Index Next

Note: For affordable legal assistance The Center For Debt Management highly recommends Standard Legal's Do-It-Yourself Bankruptcy Forms Software Kits. For credit repair services,
the most trusted law firm in America with over 15 years of experience is Lexington Law Firm.

For more bankruptcy help and bankruptcy alternatives, go to Bankruptcy Resources

Go to Index of Related Articles and Resources!

Click Below To Check Out More Financial Resources

Return to Top

The Center For Debt Management™

Helping Consumers Save Money and Reduce Debt Is Our Only Business!™

We invite you to explore the sectors listed below. We promise that you'll find exceptional values, offers and resources in which to reduce your living expenses and to enjoy life!


Debt Management and Financial Services! The Internet's oldest and most comprehensive debt management agency! Resources for debt management, consumer credit counseling, debt consolidation, debt reduction settlements, legal aid, financial aid, loans and financing, credit repair, credit reports, insurance quotes, income sources, tax assistance, and more.

Established in 1989 and serving the online community since 1992!


This site was created and designed by Daniel A. Gelinas
Disclaimer and Privacy Policy      © Copyright  2007 "The Center For Debt Management"      Contact Us
Return to Top

Legal Resource Center: United States Code TITLE 11 Filing Bankruptcy Forms Software