House Bill 7370 has gained additional support since we last reported on the Protecting Employees and Retirees in Business Bankruptcies Act of 2020 (PERBBA) and related Senate Bill 4089. Support for the bill now totals twenty-eight Democrat sponsors and co-sponsors. On September 29, 2020, House Bill 7370 advanced from the House Committee on the Judiciary to the full House for consideration, with a 20-10 committee vote along party lines.
If enacted as proposed, PERBBA would make significant changes to the bankruptcy process by, among other things, giving higher priority to claims related to worker compensation and benefits, allowing secured loans to be surcharged to pay employees, making it more difficult to reject collective bargaining agreements, and heightening the standard for allowing executive bonuses in bankruptcy.
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