Wyatt Employment Law Report


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Risk for Nonqualified Deferred Compensation Falls on Employees

By Sherry Porter

The long-running Lehman Brothers bankruptcy case brings to light the risk employees have when participating in an employer sponsored nonqualified deferred compensation plan.  In this case (from the U.S. Bankruptcy Court in Manhattan), more than 300 executives and certain employees participated in a nonqualified deferred compensation plan (the “Plan”).  The Plan provided that payments under the Plan are “unsecured subordinate obligations” of Lehman Brothers (the “Company”) and contained a provision that the Plan benefit payments would be subordinated to Continue reading