Benefits Blast

The global economy is beset by challenges that will continue to affect companies throughout 2023. Growth has slowed, high inflation is widespread, and increasing interest rates are likely to worsen financial vulnerabilities. Companies reckoning with this difficult business environment are seeking to reduce costs, including through layoffs, such as those implemented throughout the financial and technology industries.

The impact of COVID-19 is yet to be fully realized, and many companies are yet to consider restructuring as a means to survive the pandemic, but all companies and all creditors can benefit now from learning how employee matters are treated in a bankruptcy proceeding under chapter 11 of the U.S. Bankruptcy Code (as amended, the Bankruptcy Code). This blog provides a high-level overview of material matters affecting an employee workforce in the context of a chapter 11 restructuring. The rules surrounding employee and benefit matters in chapter 11 restructurings are complex and include many nuances and exceptions. Please use this summary for general information purposes only and not legal advice.