Senators Introduce Bipartisan Bill to Protect Employees When Businesses File for Bankruptcy​​​

U.S. Senate Democratic Whip Dick Durbin (D-Ill.), Ranking Member of the Senate Judiciary Committee, and U.S. Senator Josh Hawley (R-Mo.) yesterday re-introduced the "Protecting Employees and Retirees in Business Bankruptcies Act." The act would modify chapter 11 bankruptcy procedures by expanding available claims for employees and retirees and granting them improved priority, while placing restrictions on excessive compensation for executives. Specifically, the Protecting Employees and Retirees in Business Bankruptcies Act would:

• Improve Recoveries for Employees and Retirees. The bill doubles the maximum value of employee wage claims entitled to priority payment and allows additional priority claims for each employee benefit plan. It also eliminates the restriction that priority wage and benefit claims must be earned within 180 days of the bankruptcy filing to be entitled to priority, and would allow additional priority claims for workers’ severance pay.

• Protect Workers’ Rights in Bankruptcy. The bill tightens the conditions under which collective bargaining agreements can be rejected in bankruptcy. It also toughens the procedures through which retiree benefits can be reduced or eliminated.

• Restrict Excessive Executive Compensation Programs. The bill raises the threshold for obtaining court approval for executive bonuses and other excessive payouts to senior executives, the company’s 20 highest-paid employees, and highly paid consultants. It also ensures that company insiders cannot retain their retirement or health benefit plans if rank-and-file workers have lost their benefits through the bankruptcy process.

• Focus on Preserving Jobs. The bill would re-center the chapter 11 bankruptcy process by clarifying that the principal purpose of chapter 11 is to preserve jobs and economically productive activity to the greatest extent possible.

Cosponsoring the legislation are U.S. Senators Brian Schatz (D-Hawaii), Tammy Duckworth (D-Ill.), Amy Klobuchar (D-Minn.) and Sheldon Whitehouse (D-R.I.). Read more.​​​​​​

U.S. Weekly Jobless Claims Increase Slightly​​​

The number of Americans filing new applications for unemployment benefits rose slightly last week and could trend higher as companies navigate President Donald Trump's tariffs on imports, Reuters reported. Initial claims for state unemployment benefits increased 4,000 to a seasonally adjusted 223,000 for the week ended April 5, the Labor Department said on Thursday. The economy added 228,000 jobs in March, while the unemployment rate rose to 4.2% from 4.1% in February. The number of people receiving benefits after an initial week of aid, a proxy for hiring, dropped 43,000 to a seasonally adjusted 1.850 million during the week ending March 29, the claims report showed. Read more.​​​​​​

Subchapter V Experiences to Share? ABI Wants to Hear from You!

ABI is continuing its study of Subchapter V, and it needs your help! We are particularly interested in learning more about the real-world impact of Subchapter V. So our question is, do you have a story about a distressed business or creditor who has used or benefited from the subchapter? If so, could that case still happen under the lower debt cap for Subchapter V debtors? Any and all responses are welcome. Submit your story at https://abi.org/subvstories.
 

Inflation Eased in March, but Tariffs Threaten to Stoke Price Pressures​​​

Consumer prices declined month-over-month in March for the first time in nearly five years, a welcome development for inflation-weary consumers but one that economists said is likely to be short-lived due to new trade tariffs, the Wall Street Journal reported. The consumer price index fell 0.1% in March, the Labor Department said Thursday, the first time it had recorded a month-over-month decline since May 2020. Year-over-year inflation cooled sharply to a 2.4% increase in the CPI. A steep decline in gasoline prices last month helped pull that number lower. Prices excluding food and energy categories — the so-called core measure that economists watch in an effort to better capture inflation’s underlying trend — rose 2.8%. That was the smallest increase in the core measure since March 2021. Read more. (Subscription required.) 

Senator Urges DOJ to Investigate FICO for 'Monopoly' over U.S. Credit Scores​​​

Sen. Josh Hawley (R-Mo.) is urging President Donald Trump's Justice Department to investigate the nation's top credit-scoring company for abusing its "monopoly" over the industry, FoxBusiness.com reported. The Fair Isaac Corporation (FICO) has repeatedly raised prices in recent years and secured massive profits while facing little competition, Hawley wrote in a letter to Assistant Attorney General Gail Slater Friday, adding that former President Joe Biden's administration had ignored his earlier calls for scrutiny. "FICO dominates the business-to-business credit scoring market with a roughly 90% market share. It enjoys a sweetheart deal from the federal government wherein its credit scores are required for loans originated with multiple government entities. But FICO has abused its government-granted market power," Hawley wrote. FICO countered that its success is not due to any government action. "The vast majority, approximately 99%, of FICO Scores used for decisioning across the consumer credit industry are used outside mortgage originations. And even within the mortgage market, lenders originate nearly thirty percent of all mortgages outside the Fannie Mae and Freddie Mac programs but still choose to use FICO Scores for those mortgages. The royalty collected by FICO remains a small percentage of the cost of the tri-merge credit report and score bundle (on average approximately 15% of the $80 to well over $100 tri-merge bundle cost), which is itself an exceedingly small share of overall mortgage closing costs," the company said. Read more.​​​​​​

ASM Session Spotlight: AI and Bankruptcy: Navigating the Unknown​​​

Don't miss the "AI and Bankruptcy: Navigating the Unknown" session at the Annual Spring Meeting, hosted by ABI's Commercial & Regulatory Law and Emerging Industries & Technology Committees. This panel will cover the intersection of artificial intelligence (AI) with bankruptcy, intellectual property law and secured transactions law. The panelists will explore several questions that current law does not address or insufficiently addresses, such as: Who owns inventions created by AI? Do inventions created by the AI owned by a debtor company become property of a debtor company’s bankruptcy estate? Can a creditor obtain a security interest and perfect a security interest in the things AI creates? Should the UCC, intellectual property law and bankruptcy law be amended to address the new world of AI? Find out the answers to these questions and more! Register today.

Third Circuit Invites Public Comments by May 15 for Reappointment of Bankruptcy Judge Carlota M. Böhm​​​

The current term of office of the Hon. Carlota M. Böhm, U.S. Bankruptcy Judge for the Western District of Pennsylvania in Pittsburgh, is due to expire on Nov. 27, 2025. The U.S. Court of Appeals for the Third Circuit is considering the reappointment of Judge Böhm to a new 14-year term of office. Members of the bar and the public are invited to submit comments for consideration by the court of appeals regarding the reappointment of Judge Böhm. All comments will be kept confidential and should be directed to one of the following addresses: by email at Bohm_Reappointment@ca3.uscourts.gov or by mail to Margaret A. Wiegand, Circuit Executive, 22409 U.S. Courthouse, 601 Market Street, Philadelphia, PA 19106. Comments must be received no later than May 15, 2025. Read more.​​​​​​

Applications Being Accepted Through June 2 for NCBJ/ABI Trial Skills Workshop in Chicago​​​

NCBJ and ABI will again offer an intensive, full-day workshop designed for bankruptcy practitioners to build trial skills and increase confidence for better outcomes for clients. This learn-by-doing program on Sept. 17 in Chicago is limited to 20 attorneys with 12 or fewer years of practice. Interact with 15 sitting federal judges over breakfast and lunch (included) at the U.S. District Courthouse in Chicago, and network with other participating bankruptcy attorneys. Applications must be received by June 2! Click here for more information and to submit an application. 

Application and Nomination Period for ABI’s 2025 “40 Under 40” Open Through June 30​​​

The ABI "40 Under 40" annual program continues to highlight the best up-and-comers in the industry. If you are, or know of, a dynamic insolvency professional who is committed to growth and excellence both professionally and in your community, this is one opportunity not to be missed! Applications are due June 30. Click here for more information and to submit a nomination or application. 

Access All Current ABI Titles Through ABI’s New Digital Book Subscription!​​​

One of the best collections of bankruptcy books is now available as an annual digital subscription! ABI’s bankruptcy library opens the door to a constantly evolving area of the law, and our books are continually being updated by top industry professionals. Auto-renewing annual subscriptions guarantee immediate access to this invaluable resource, which is comprised of fully searchable content that’s always available on any digital device. Convenient pricing plans for individual and institutional subscribers offer immediate and unlimited access to our entire digital library of books — nearly 100 treatises! Plus, you get advanced access to new and revised books as soon as they are published — all included in your annual subscription. Learn more!

Have an Idea for a Topic for an ABI Conference Session? Submit Your Proposal via ABI’s “Call for Abstracts” Page!​​​

ABI has launched an online portal for professionals to submit proposals for educational sessions at future ABI conferences. Submitters can describe their proposed topic, outline the session’s focus and learning goals, suggest speakers, and provide contact information via the portal’s detailed form. The portal can be accessed here.

All submissions will be reviewed by an internal Education Committee, which will contact the submitter to ask questions as needed and to discuss the status of the proposal. Submissions will be reviewed on a rolling basis.

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