Legal Developments

Potential hourly wage system

The Ministry of Labor and Social Development (MOL) is discussing a potential new employment system for Saudi employees named “Flexible Work” (Flexible Work). Flexible Work will be a system whereby an employee may be paid an hourly wage on a weekly basis in arrears, and various entitlements currently required under the Labor Law for conventional employees would not be required, such as:

Capital markets are the platform on which buyers and sellers, including both individuals and businesses, buy and sell financial securities, such as stocks, bonds and related debt and equity instruments. Capital markets help channel surplus funds from savers to institutions by facilitating an open, transparent and safe environment in which to trade securities. Capital markets consist of primary markets on which new issues of securities are traded, and secondary markets, on which existing or previously-issued securities are traded.

Lenders should be aware that a broad definition of “wages” owing to employees of a borrower/customer in bankruptcy or receivership can take priority over what a lender might otherwise believe is its “first ranking charge” against the borrower.

Amendments to the Bankruptcy and Insolvency Act (BIA) and related new legislation came into force in the summer of 2008 which were aimed at significantly enhancing and protecting, among other things, employee related claims against bankrupt or insolvent companies. The amendments included a super priority charge over all assets for some, but not all, pension claims as well as a limited priority charge over certain assets for some wages owing to employees, subject to a cap for each employee.

Companies in the health care industry face many unique challenges when undergoing a bankruptcy, including challenges arising due to the federal and state law framework governing the use and disclosure of medical information. In February 2018, the U.S. Department of Health and Human Services announced that it had reached a settlement with the receiver appointed to liquidate the assets of Filefax Inc., a medical record storage and transportation company, resolving claims against Filefax for potential violations of the Health Insurance Portability and Accountability Act, or HIPAA.

It has been reported that “medical bankruptcies” have been on the rise since 2001. There is no clear-cut definition for “medical bankruptcy,” but it has been summarily defined by the following terms:

Once a company files a Chapter 11 bankruptcy petition (to sell its assets, reorganize or liquidate), Bankruptcy Code § 1114 sets forth a detailed procedure for the employer to follow to modify or terminate certain retiree benefits. Among other things, § 1114 imposes on the employer the burden of showing that the elimination or modification of benefits is necessary to permit reorganization.

The Chapter 9 bankruptcy case of Stockton, California has come to an unexpectedly quick and consensual resolution.

The U.S. Bankruptcy Appellate Panel for the Eighth Circuit affirmed a lower court ruling that the funds in a debtor’s Health Savings Account (HSA) are not excluded from the bankruptcy estate and are not exempt. On the date of his bankruptcy filing, the debtor listed the funds in his HSA as an asset that should be excluded from the bankruptcy estate. He specifically asserted that under 11 U.S.C.

The bankruptcy of the largest U.S. city to file a chapter 9 bankruptcy petition has yielded a decision with serious implications for municipal creditors. Specifically, the United States Bankruptcy Court for the Eastern District of California overruled the objections asserted by retired employees of the City of Stockton, California and authorized the City to suspend the retiree’s health benefits during the City’s Chapter 9 case. Ass’n of Retired Employees of the City of Stockton, et al. v. City of Stockton, California (In re City of Stockton), 56 Bankr.Ct.Dec. 250 (Bankr. E.D.