Employee Considerations In Corporate Restructurings

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.

While the impact of present economic challenges is yet to be fully realized, and many companies have yet to consider restructuring as an alternative, companies and 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 some of the most material matters affecting an employee workforce in the context of a chapter 11 restructuring. The rules surrounding employee and benefit matters in