The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005:

Question

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The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 includes provisions that allow for key employee retention plans, but these are generally permitted only if there is evidence that the employee has another job offer and their retention is critical to the business's survival or restructuring process. This is to prevent abuse of bankruptcy laws by ensuring that bonuses or retention plans are truly necessary for the company's recovery and are not just a means to enrich executives at the expense of creditors or the bankruptcy estate.