Some companies made headlines in 2020 for paying their executives large bonuses while undergoing Chapter 11 bankruptcy. While the Bankruptcy Code restricts executive retention bonuses during bankruptcy, our review of FY 2020 data showed that some debtors may be working around the Code's restrictions by paying these bonuses prior to filing.

We recommended that Congress amend the Code to bring pre-bankruptcy bonuses under court oversight and specify factors the court should consider before approving them. READ MORE