Retiree Benefits And Bankruptcy Code Compliance

Law360, New York (October 15, 2010, 12:20 PM EDT) -- Once a company files a Chapter 11 bankruptcy petition (to sell its assets, reorganize or liquidate), Bankruptcy Code § 1114 sets forth a detailed procedure for the employer to follow to modify or terminate certain retiree benefits.

Among other things, § 1114 imposes on the employer the burden of showing that the elimination or modification of benefits is necessary to permit reorganization. Since the enactment of § 1114 in 1988, a recurring issue has been whether these procedures need to be followed where, as is frequently...
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