I am not a legal person, but I thought that in bankruptcy cases, employee earnings were ahead of creditors when deciding who gets paid first. (Please correct me if I am wrong.) I consider the pension as part of the earnings since they were earned through the labor of the employees. Changing this would be as dangerous as doing something like ..... taking money from insured deposits to pay a bank's creditors.
We must be very careful about the precedents we set. Or as my old grandpappy used to say, 'Be careful what you ask for, somebody might give it to you."
Pension is different than wages... from what I see they are the next level... with limitations...
I wonder where the bonds would land....
This is from a search... I looked a Chp 9, but it sent me back to this list...
10 Priority Claims
In order, with 1 being the highest priority and 10 being the lowest, the priority claims are:
- Domestic support obligations, such as alimony or child support
- Administrative expenses of the bankruptcy case
- Debts incurred after an involuntary petition but before bankruptcy has been declared; when creditors try to force a debtor into bankruptcy by filing an involuntary petition, the courts give priority to entered into after the petition is filed in order to encourage suppliers, contractors, and creditors to keep doing business with the debtor
- Employee wages, up to $10,950 per employee
- Unpaid contributions to employee benefit plans, with some limitations
- Claims for grain from a grain producer or fish from a fisherman, which keeps the cast of Deadliest Catch happy
- Consumer layaway deposits of up to $2,425 each
- Taxes incurred prior to the bankruptcy petition
- Commitments to Federal depository institutions to maintain the institution’s capital
- Claims for death or personal injury from DUI/DWI
Edit to add, found the limitations...
(5) Fifth, allowed unsecured claims for contributions to an employee benefit plan—
(A) arising from services rendered within 180 days before the date of the filing of the petition or the date of the cessation of the debtor’s business, whichever occurs first; but only
(B) for each such plan, to the extent of— (i) the number of employees covered by each such plan multiplied by $10,000; less
(ii) the aggregate amount paid to such employees under paragraph (4) of this subsection, plus the aggregate amount paid by the estate on behalf of such employees to any other employee benefit plan.
Which seems to leave out a big chunk of what is owed...