Changing the bankruptcy code to elevate worker claims could make new creditors more reluctant to provide rescue financing to preserve a company and its jobs, said Patrick Collins, a bankruptcy lawyer at Farrell Fritz in Uniondale, New York.
“It shifts value from one class to another and it makes it harder to confirm a plan” that would allow a company to exit bankruptcy, he said.
Ryan said there needs to be a broader reevaluation of workers’ roles amid a technological revolution that’s upending the global economy.
“The approach needs to be how do we move from shareholder capitalism to stakeholder capitalism,” he said.
This article provided by Bloomberg News.