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Course Details

Course Information
  • smart_display Format

    Live Online with Live Q&A

  • signal_cellular_alt Difficulty Level

    Intermediate

  • work Practice Area

    Bankruptcy

Date & Time
  • event Date

    Thursday, November 20, 2025

  • schedule Time

    1:00 p.m. ET./10:00 a.m. PT

  • timer Program Length

    90 minutes

Credit Information

  • This 90-minute webinar is eligible in most states for 1.5 CLE credits.


  • Live Online


    On Demand

$297.00

This course is $0 with these passes:

CLE
ALL

This CLE webinar is about key employee incentive plans (KEIPs), key employee retention plans (KERPs), and other executive compensation payments before, during, or after Chapter 11 bankruptcies. The panel will discuss the thin line between Bankruptcy Code Sections 503(c)(1) and (c)(3), how to create approvable programs, burdens of proof, and overcoming objections, taking examples from influential courts. The panel will also identify possible securities law issues for publicly traded companies.

Faculty

Rohit A. Nafday
Partner
Kirkland & Ellis

Mr. Nafday is a partner in the Firm’s Executive Compensation Practice Group. His practice focuses on the executive compensation and benefits aspects of public and private mergers, acquisitions, reorganizations, and other corporate transactions. Mr. Nafday also regularly advises clients on the negotiation of executive employment, change in control, retention, and severance agreements, the design and implementation of equity compensation arrangements, and tax, securities, and corporate governance matters related to compensation arrangements. He is recognized in the latest editions of Chambers USA, The Legal 500 United States and Super Lawyers for his executive compensation practice.

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Description

Prefiling executive retention and other performance-based awards before or after bankruptcy are becoming the norm. Such payments may be subject to clawbacks under Bankruptcy Code Section 548. Corporate debtors may arrange a deal with their creditors behind the scenes to fend off a public fight before announcing a bonus plan to avoid these issues. They must understand the risks because the Bankruptcy Code provides creditors and other parties in interest with a potential and effective means of challenging restructuring compensation payments.

When seeking approval for KEIPs and KERPS, counsel must understand the applicable standards and burdens of proof under Bankruptcy Code Sections 503(c)(1) and (c)(3), as well as whether testimony and other evidence are sufficient to meet its burden. If proceeding under Section 503(c)(3), the proponent must show how the payment incentivized participation and is not a hidden retention program. Courts are unsettled regarding the meaning in Section 503(c)(3) of "justified by the facts and circumstances of the case."

Other stakeholders' or U.S. Trustee objections may significantly modify and reduce these payments. Courts are required to consider many factors in approving incentive and retention payments. The structure of the plans, the treatment of each recipient, and platitudinous justifications are closely analyzed and require specific factual evidence to support them.

Listen as this experienced panel of bankruptcy attorneys and restructuring compensation professionals guides counsel through executive compensation in Chapter 11.

Outline

I. Options for executive compensation before and after a bankruptcy filing

II. The importance of timing

III. KEIP vs. KERP

IV. Requirements for approval

V. Common objections

VI. Evidentiary issues

Benefits

The panel will review these and other pivotal issues:

  • How do courts decide whether a KEIP target genuinely incentivizes insiders?
  • What does "justified by the facts and circumstances of the case" in 503(c)(3) mean?
  • Are bonuses justified when parties have negotiated a pre-filing sale?
  • How should debtors document each person's contribution to a reorganization effort?
  • How should counsel document the achievement of milestones, if needed?
  • What are the methods to determine reasonable compensation amounts?