What happens saleried managers duing bancruptcy?

Answer 1

If you are talking about salaried managers who file bankruptcy, most likely nothing will happen to them.

If you are talking about salaried managers working for a business that has filed bankruptcy, you may expect being laid off, fired, or asked to take a pay cut or pay more for insurance or other benefits, at least if it is a chapter 11 (corporate or non-person business entity). If it is a chapter 7, the business is probably over with. If it is a person doing business as (dba) filing a c. 13, the business and the salaried managers might survive.

Sorry to dispute the above, but in the many C-11 BKs I've been involved with:

Salaried (or not) people in a Co that files C-11, are certainly at risk of losing their positions...but as a result of the business reorganization not the BK itself. (The business generally changes operations, frequently selling or closing some, hence jobs disappear). Generally, severance packages in these situations exist, but are not as generous as when it is done as part of a more discretionary action of the business.

All the plant closure rules affording notice and benefits still exist during the BK for all the employees.

Contrary to the above, my experience is that many managers, if important to the business, are given great incentives (promised bonuses, benefit increases, etc), to stay with the troubled company rather than jumping ship and going some place else. Even if the position is going to be eliminated, say by sale of the department or facility he works at, in order to keep the business going until the creditors complete that, they are given a "stay on incentive" package...stay to the end and get $$.

It actually makes sense that this is done as their expertise and abilities are crucial to making re-organization plans work...and attracting new talent while in trouble/BK is difficult and expensive...and business being what it is, they are being recruited by others who want to take advantage of the situation (especially as employees at a failing Co have frequently been dissatisfied because the prior few years bonuses/raises, etc have been small, and benefits restricted.)

Like all employees of a BK, they are given a high priority in getting paid...and normally a "first day order" by the court authorizes the debtor to pay any payroll from both pre and post petition periods. (Agreeably, some things like accrued bonus etc may be slighted or delayed).