Web posted and Copyright © 1/12/98, American Bankruptcy Institute.

The following abstract summarizes the text of submissions made to the National Bankruptcy Review Commission. The abstract is organized by NBRC working group and topic.

The Final Report of the NBRC can be viewed on-line. To obtain a copy of any document shown below, contact the Center for Legislative Archives, Room 205, National Archives Building, Washington, D.C. 20408. The telephone number is 202/501-5350. Mr. R. Michael McReynolds, Deputy Director, will be able to assist with specific inquiries. (The NBRC documents will be housed at this location until June, 1999. Thereafter, the records will be transferred to the Center's archives in College Park, MD.)

Final Abstract Summary
IDNameGroupOtherCode
Sec
Cross
Ref
Problem ReferencedProposed Solutions
NBRC-
0301
National
Bankruptcy
Conference
National
Bankruptcy
Conference
(NBC),
Bernard
Shapiro,
Chair



NBC believes that the following issue merits study by the NBRC: whether bankruptcy judges should be given Article III status.NBC believes that bankruptcy judges should be given Article III status in order to decrease the amount of judicical time spent deciding which courts can decide which lawsuits. Also, the Bankruptcy Code should be amended to make clear that all matters relating to the bankruptcy case may be decided in the bankruptcy court. This proposal does not suggest that those currently serving as bankruptcy judges automatically be given Article III status.
NBRC-
0301
National
Bankruptcy
Conference
National
Bankruptcy
Conference
(NBC),
Bernard
Shapiro,
Chair



NBC believes that the following issue merits study by the NBRC: all aspects of bankruptcy adminstration, including whether the U.S. Trustee's duties should be more clearly delineated and provided with the capacity to fulfilll those duties.NBRC should conduct an updated review of the U.S. Trustee system, and examine the effects of its 1986 expansion.
NBRC-
0301
National
Bankruptcy
Conference
National
Bankruptcy
Conference
(NBC),
Bernard
Shapiro,
Chair

105
NBC believes that the following issues merit study by the NBRC: whether there are modifications that should be made to Chapter 11 to streamline the process, reduce the costs and deal with cases of minimal creditor interest without damaging the beneficial rehabilitative effect of business reorganizations, and whether the bankruptcy judge should be given a more active case management role as contemplated by the 1994 amendments to § 105.None.
NBRC-
0301
National
Bankruptcy
Conference
National
Bankruptcy
Conference
(NBC),
Bernard
Shapiro,
Chair



NBC believes that the following issue merits study by the NBRC: whether the law of partnerships should be "totally reconsidered."NBC concludes that partnership law should be "reconsidered." (No additional details are provided. The NBC Report, however, which discusses this position more thoroughly, has been "refined" and will be available to the NBRC.)
NBRC-
0301
National
Bankruptcy
Conference
National
Bankruptcy
Conference
(NBC),
Bernard
Shapiro,
Chair



NBC believes that the following issue merits study by the NBRC: whether the law of executory contracts should be "totally reconsidered."NBC concludes that executory contract law should be "reconsidered." (No additional details are provided. The NBC Report, however, which discusses this position more thoroughly, has been "refined" and will be available to the NBRC.)
NBRC-
0301
National
Bankruptcy
Conference
National
Bankruptcy
Conference
(NBC),
Bernard
Shapiro,
Chair



NBC believes that the following issue merits study by the NBRC: whether the law of partnerships should be "totally reconsidered."NBC concludes that partnership law should be "reconsidered." (No additional details are provided. The NBC Report, however, which discusses this position more thoroughly, has been "refined" and will be available to the NBRC.)
NBRC-
0301
National
Bankruptcy
Conference
National
Bankruptcy
Conference
(NBC),
Bernard
Shapiro,
Chair

28 U.S.C.
§ 2075

NBC believes that the following issue merits study by the NBRC: whether 28 U.S.C. § 2075 should be amended to provide that "the Supreme Court rule making power can be used to promulgate rules of practice and procedure incosistent with the procedural provisions of the Code." This was the law prior to adoption of the 1978 Bakruptcy Code, and the law worked well.Serious consideration should be given to restoring the Supreme Court's authority over all aspects of bankrupty practice and procedure.
NBRC-
0301
National
Bankruptcy
Conference
National
Bankruptcy
Conference
(NBC),
Bernard
Shapiro,
Chair



NBC believes that the following issue merits study by the NBRC: whether a substantial effort should be made to repeal the special purpose legislation that has been engrafted upon the Code since 1978. This legislation contains arcane provisions that have resulted in "privileged treatement for a few."Special purpose legislation should be repealed in order to promote the goals of equality of distribution, rehabilitation, and protection of the discharge.
NBRC-
0301
National
Bankruptcy
Conference
National
Bankruptcy
Conference
(NBC),
Bernard
Shapiro,
Chair



NBC believes that the following issue merits study by the NBRC: whether bankruptcy appeals should be made directly to the Court of Appeals. The current two-step appellate process is a waste of judicial resources and needlessly delays the resolution of bankruptcy cases.Bankruptcy system should be restructured so that appeals are made directly to the Court of Appeals.
NBRC-
0302
Brian L.
Mc Donnell
President,
Navy
Federal
Credit
Union

521
Bankruptcy is increasingly being perceived as an "easy way out" for debtors seeking to avoid responsibility for their actions. In addition, many people no longer consider bankruptcy to be a financial stigma. It is imperative that bankruptcy procedures be revised to discourage financial irresponsibility in today's highly leveraged personal economic environment.Amend § 521 to require debtors who have not completed a personal financial management course in the previous 180 days to complete appropriate financial counseling and training within 45 days after filing a petition, without which the petition will be automatically dismissed.
NBRC-
0302
Brian L.
Mc Donnell
President,
Navy
Federal
Credit
Union

301, 707
Bankruptcy is increasingly being perceived as an "easy way out" for debtors seeking to avoid responsibility for their actions. In addition, many people no longer consider bankruptcy to be a financial stigma. It is imperative that bankruptcy procedures be revised to discourage financial irresponsibility in today's highly leveraged personal economic environment.Revise §§ 301 and 707 to provide that a petition must receive full consideration under chapter 13 before establishing eligibility for consideration under chapter 7. Alternatively, revise § 707 to permit creditors to enter a motion for dismissal of a chapter 7 filing where the debtor's earns sufficeint income to permit repayment of debts under a chapter 13 plan.
NBRC-
0302
Brian L.
Mc Donnell
President,
Navy
Federal
Credit
Union

1322
Bankruptcy is increasingly being perceived as an "easy way out" for debtors seeking to avoid responsibility for their actions. In addition, many people no longer consider bankruptcy to be a financial stigma. It is imperative that bankruptcy procedures be revised to discourage financial irresponsibility in today's highly leveraged personal economic environment.Modify § 1322 to extend the chapter 13 plan to provide for payments over a period of six years and, for cause, to permit the court to approve a longer reasonable period without statutory limitaiton.
NBRC-
0302
Brian L.
Mc Donnell
President,
Navy
Federal
Credit
Union



Bankruptcy is increasingly being perceived as an "easy way out" for debtors seeking to avoid responsibility for their actions. In addition, many people no longer consider bankruptcy to be a financial stigma. It is imperative that bankruptcy procedures be revised to discourage financial irresponsibility in today's highly leveraged personal economic environment.Amend the Code to establish a nationwide database to discourage abuse through multiple filings in multiple jurisdictions.
NBRC-
0302
Brian L.
Mc Donnell
President,
Navy
Federal
Credit
Union

342, 521 Bankruptcy is increasingly being perceived as an "easy way out" for debtors seeking to avoid responsibility for their actions. In addition, many people no longer consider bankruptcy to be a financial stigma. Bankruptcy filings represent significant time and money burdens for creditors and the courts, the costs of which are often passed on to customers of the creditors in the form of higher prices. It is imperative that bankruptcy procedures be revised to discourage financial irresponsibility in today's highly leveraged personal economic environment. One way of reducing the administrative burden of bankruptcy filings would be to require improved documentation.Sections 342 and 521 and Rule 2002 should be amended to provide for improved documentation that would more clearly establish the debtor's finances, creditors, and intent. Suggested statutory provisions are provided.
NBRC-
0302
Brian L.
Mc Donnell
President,
Navy
Federal
Credit
Union

362, 1301
Bankruptcy is increasingly being perceived as an "easy way out" for debtors seeking to avoid responsibility for their actions. In addition, many people no longer consider bankruptcy to be a financial stigma. Bankruptcy filings represent significant time and money burdens for creditors and the courts, the costs of which are often passed on to customers of the creditors in the form of higher prices. It is imperative that bankruptcy procedures be revised to discourage financial irresponsibility in today's highly leveraged personal economic environment. One way of reducing the administrative burden of bankruptcy filings would be to enhance the cost-effectiveness of bankruptcy proceedings.To enhance the "cost-effectiveness" of bankruptcy proceedings, § 362 should be amended to establish an exemption to the automaitc stay in cases where: (1) joint debt is involved, and one or more joint debtors files a subsequent petition for relief within 120 days of a prior filing by an another joint debtor; (2) debtors wish to voluntarily convey collateral to debtors; (3) a chapter 13 debtor falls more than 60 days behind scheduled repayments; and (4) creditors will continue accepting payments on loans for collateral that dentors intend to retain. Also, to increase the "cost-effectiveness" of bankruptcy proceedings, § 1301 should be amended to repeal those provisions that prohibit collection from a nonbankrupt co-debtor until the automatic stay is lifted.
NBRC-
0302
Brian L.
Mc Donnell
President,
Navy
Federal
Credit
Union

523, 727Rules
4004
and
4005
Bankruptcy is increasingly being perceived as an "easy way out" for debtors seeking to avoid responsibility for their actions. In addition, many people no longer consider bankruptcy to be a financial stigma. Bankruptcy filings represent significant time and money burdens for creditors and the courts, the costs of which are often passed on to customers of the creditors in the form of higher prices. It is imperative that bankruptcy procedures be revised to discourage financial irresponsibility in today's highly leveraged personal economic environment. One way of reducing the administrative burden of bankruptcy filings would be to enhance the "cost-effectiveness" of bankruptcy proceedings.To enhance the "cost-effectiveness" of bankruptcy proceedings, § 523 should be amended to: (1) simplify the requirements and procedures for creditors to show false pretenses in connection with loans obtained within 60 days (author recommends 180 days) of the order for relief; (2) extend the period of obtaining a loan for luxury items from 60 days to 180 days of the order for relief and redusing the thresholds for cash advances and purchases of luxury items from $1000 to $100; and (3) stipulate that costs of a successful dischargeability challenge by the creditor will be borne by the debtor (§ 523(d)). Section 727 and Rule 4005 should be amended to stipulate that costs of a creditor's successful objection to the discharge will be borne by the debtor.
NBRC-
0302
Brian L.
Mc Donnell
President,
Navy
Federal
Credit
Union

522
Bankruptcy is increasingly being perceived as an "easy way out" for debtors seeking to avoid responsibility for their actions. In addition, many people no longer consider bankruptcy to be a financial stigma. Bankruptcy filings represent significant time and money burdens for creditors and the courts, the costs of which are often passed on to customers of the creditors in the form of higher prices. It is imperative that bankruptcy procedures be revised to discourage financial irresponsibility in today's highly leveraged personal economic environment. To reduce the administrative burden of bankruptcy proceedings, fair and equitable guidelines should be established.In the interest of establishing fair and equitable guidelines, § 522 should be revised to provide a framework for greater uniformity of exemptions among various bankruptcy court jurisdictions.
NBRC-
0302
Brian L.
Mc Donnell
President,
Navy
Federal
Credit
Union

1322,
1325,
1326,
Rule
3015

Bankruptcy is increasingly being perceived as an "easy way out" for debtors seeking to avoid responsibility for their actions. In addition, many people no longer consider bankruptcy to be a financial stigma. Bankruptcy filings represent significant time and money burdens for creditors and the courts, the costs of which are often passed on to customers of the creditors in the form of higher prices. It is imperative that bankruptcy procedures be revised to discourage financial irresponsibility in today's highly leveraged personal economic environment. One way of reducing the administrative burden of bankruptcy filings would be to enhance the cost-effectiveness of bankruptcy proceedings.To enhance the "cost-effectiveness" of bankruptcy proceedings, Rule 3015 should be amended to: (1) automatically provide a copy of the plan to the creditor; (2) extend the amount of time a creditor has to object to an amended plan from 20 days to 30 days; and (3) revise §§ 1322, 1325, and 1326 and Rule 3015 to insure that all disposable income will be distributed to creditors for the full term of the plan or until the creditors are paid in full. Also, in the interest of establishing fair and equitable guidelines for bankruptcy proceedings, the Bankruptcy Code and Rules should be amended to provide for greater uniformity in procedures, forms and practices of the various bankruptcy courts.
NBRC-
0303
Comm.
Law
League
of
America
Comm.
Law
League
of
America
(CLLA)

 
The Commerical Law League of America believes that the following issues should be considered by the NBRC: (1) whether the current appellate system should be changed to eliminate the district court review; (2) whether Congress should eliminate provisions which require withdrawl of the district court's reference to the bankruptcy court.The CLLA believes that the first issue should receive top priority, and the second should receive moderate priority. While the second issue is interesting, it is probably not worth the investment of the NBRC's limited resources.
NBRC-
0303
Comm.
Law
League
of
America
Comm.
Law
League
of
America
(CLLA)



The Commerical Law League of America believes that the following issue should be considered by the NBRC: whether bankruptcy judges should receive Article II status. The CLLA believes that this issue is a non-priority. Article III status is really a political issue regardless of the probably very valid rationale developed by the NBRC to support conferring Article III status.Article III status is a political hot potato, and debate over this issue would not be a good investment of the NBRC's limited resources.
NBRC-
0303
Comm.
Law
League
of
America
Comm.
Law
League
of
America
(CLLA)



The Commerical Law League of America believes that the following issue should be considered by the NBRC: whether Congress should eliminate provisions in Title 28 requiring mandatory abstention from the exercise of jurisdiction by the district court in certain circumstances,The CLLA believes that this issue should receive moderate priority, and does not recommend a significant investment of the NBRC's resources on this issue.
NBRC-
0303
Comm.
Law
League
of
America
Comm.
Law
League
of
America
(CLLA)



The Commerical Law League of America believes that the following issue should be considered by the NBRC: whether there is a rational basis for excluding personal injury claims from the jurisdiction of bankruptcy courts.The CLLA believes that this issue should receive top priority because it represents a fundamental issue facing the bankruptcy system today.
NBRC-
0303
Comm.
Law
League
of
America
Comm.
Law
League
of
America
(CLLA)



The Commerical Law League of America believes that the following issue should be considered by the NBRC: whether bankruptcy courts should be permitted to conduct jury trials even with the consent of both parties. If they should not, how should the system address jury demands made for strategic advantageThe CLLA believes that this issue should receive moderate priority.
NBRC-
0303
Comm.
Law
League
of
America
Comm.
Law
League
of
America
(CLLA)



The Commerical Law League of America believes that the following issue should be considered by the NBRC: whether bankruptcy courts should be authorized to exercise the full range of contempt powers currently exercised by the district courts.The CLLA believes that this issue should receive top priority, and that the Code should be amended to clearly provide language authorizing bankruptcy courts to exercise contempt powers.
NBRC-
0303
Comm.
Law
League
of
America
Comm.
Law
League
of
America
(CLLA)



The Commerical Law League of America believes that the following issue should be considered by the NBRC: whether Congress should restrict the venue options for corporate debtors by eliminating the option basde on place of incorporation Should Congress curtail the ability of a parent corporation to follow its subsidiary into a venue that would otherwise be unavailableThe CLLA believes that this issue should receive top priority, and that the Code should amended so that venue is permitted only where the corporation has a real and tangible connection.
NBRC-
0303
Comm.
Law
League
of
America
Comm.
Law
League
of
America
(CLLA)



The Commerical Law League of America believes that the following issue should be considered by the NBRC: how the bankruptcy system can best accomodate the constitutional constraints of sovereign immunity.The CLLA believes that this issue should receive moderate priority because while it is interesting issue, it is not an issue that is faced with any regularity by those who are not active in the practice of bankruptcy law.
NBRC-
0303
Comm.
Law
League
of
America
Comm.
Law
League
of
America
(CLLA)



The Commerical Law League of America believes that the following issue should be considered by the NBRC: what is the goal of consumer bankruptcy The CLLA believes that this issue should receive moderate priority because it is likely that the answer to the question of consumer bankruptcy's goal would bear a striking resemblance to the goals that now exist for consumer bankruptcy. Therefore, little or no resources need to be invested in this issue.
NBRC-
0303
Comm.
Law
League
of
America
Comm.
Law
League
of
America
(CLLA)



The Commerical Law League of America believes that the following issue should be considered by the NBRC: should audits of debtors' financial backgrounds become a part of the consumer bankruptcy systemThe CLLA believes that this issue is a non-priority because the ultimate recommendation would probably be too costly and burdensome to implement.
NBRC-
0303
Comm.
Law
League
of
America
Comm.
Law
League
of
America
(CLLA)



The Commerical Law League of America believes that the following issue should be considered by the NBRC: whether repeat filing is a significant problem, and how can it be controlledThe CLLA believes that this issue should receive moderate priority.
NBRC-
0303
Comm.
Law
League
of
America
Comm.
Law
League
of
America
(CLLA)

707(b)
The Commerical Law League of America believes that the following issues should be considered by the NBRC: (1) Should the bankruptcy system explictly permit or prohibit pre-bankruptcy planning in consumer cases; and (2) Does § 707(b) in its current form serve a useful functionThe CLLA believes that the first issue is a "non-priority," and that the second issue is a top priority (no additional details are provided).
NBRC-
0303
Comm.
Law
League
of
America
Comm.
Law
League
of
America
(CLLA)



The Commerical Law League of America believes that the following issue should be considered by the NBRC: what are the consequences to debtors and creditors of decreasing the scope of the bankruptcy discharge Should it be further constrained Should it be restored to its original scopeThe CLLA believes that this issue is a moderate priority (no additional details are provided).
NBRC-
0303
Comm.
Law
League
of
America
Comm.
Law
League
of
America
(CLLA)



The Commerical Law League of America believes that the following issue should be considered by the NBRC: should the bankruptcy system permit in forma pauperis filing of bankruptcy petitionsThe CLLA believes that this issue should receive moderate priority. The CLLA supports making access to the bankruptcy system as available as possible and suggests that the installment method of payment of the filing fee be the preferred method for making that access to the courts more available.
NBRC-
0303
Comm.
Law
League
of
America
Comm.
Law
League
of
America
(CLLA)



The Commerical Law League of America believes that the following issues should be considered by the NBRC: Should property exemptions in bankruptcy be uniform in all fifty states If not, should the federal exemptions provide a ceiling on the state exemptions Is retail or wholesale valuation more appropriate for determining a creditor's allowed secured claim for property that a debtor wants to keep in a chapter 13The CLLA believes that these issue should receive top priority (no additional details are provided). The CLLA believes that use of the terms "retail" and "wholesale" when describing valuation is confusing, and that it would probably be better to use "market" and "liquidation" respectively.
NBRC-
0303
Comm.
Law
League
of
America
Comm.
Law
League
of
America
(CLLA)



The Commerical Law League of America believes that the following issues should be considered by the NBRC: Should consumer bankruptcy be organizaed around a chapter 7/chapter 13 split If so, should the differences between the chapters be expanded or contracted Should individuals be steered toward one chapter or anotherThe CLLA believes that this issue should receive moderate priority (no additional details are provided).
NBRC-
0303
Comm.
Law
League
of
America
Comm.
Law
League
of
America
(CLLA)



The Commerical Law League of America believes that the following issue should be considered by the NBRC: Should more be done to provide consumer counseling alternatives to bankruptcy Should consumer education become part of the bankruptcy process Who should perform this functionThe CLLA believes that these issues should receive top priority (no additional details are provided).
NBRC-
0303
Comm.
Law
League
of
America
Comm.
Law
League
of
America
(CLLA)



The Commerical Law League of America believes that the following issue should be considered by the NBRC: whether small businesses should be permitted to reorganize in chapter 13. Or should business bankruptcies be handled in other chaptersThe CLLA believes that this issue should receive top priority because this issue has become more important with the increase in debt limitations for filing chapter 13, particularly with the sole proprietorship and professionals who are seeking relief under chapter 13.
NBRC-
0303
Comm.
Law
League
of
America
Comm.
Law
League
of
America
(CLLA)



The Commerical Law League of America believes that the following issue should be considered by the NBRC: for consumer bankruptcies, is the § 341 meeting efficient and effectiveThe CLLA believes that this issue should receive top priority (no additional details are provided).
NBRC-
0303
Comm.
Law
League
of
America
Comm.
Law
League
of
America
(CLLA)



The Commerical Law League of America believes that the following issue should be considered by the NBRC: Should the bankruptcy trustee's tax responsibilities be modified and streamlined through the creation of a specific chapter of the Internal Revenue Code devoted solely to issues unique to bankruptcy reporting, sales of assets from the debtors estate, and avilability of tax attributes to the benefit of the estateNone.
NBRC-
0303
Comm.
Law
League
of
America
Comm.
Law
League
of
America
(CLLA)



The Commerical Law League of America believes that the following issues should be considered by the NBRC: What role does chapter 11 serve in the American economy How do parties use the system to reorder business relationships Can the benefits of job preservation and preservation of going-concern value be strengthenedThe CLLA believes that these issues should receive top priority (no additional details are provided).
NBRC-
0303
Comm.
Law
League
of
America
Comm.
Law
League
of
America
(CLLA)



The Commerical Law League of America believes that the following issues should be considered by the NBRC: Does the Bankruptcy Code adeuately protect employee benefits Should old equity be permitted to participate in the reorganization of a business if it contributes to new value How should such participantion be regulated (significant case law is available on this issue)The CLLA believes that these issues should receive top priority (no additional details are provided).
NBRC-
0303
Comm.
Law
League
of
America
Comm.
Law
League
of
America
(CLLA)



The Commerical Law League of America believes that the following issue should be considered by the NBRC: What should be the rules for including claims together in the same class How much freedom should the plan proponents have to make classification decisions Should the requirement that at least one impaired class of creditors accept a plan be amendedThe CLLA believes that these issues should receive top priority (no additional details are provided).
NBRC-
0303
Comm.
Law
League
of
America
Comm.
Law
League
of
America
(CLLA)



The Commerical Law League of America believes that the following issue should be considered by the NBRC: Should the court exercise control over claims trading If so, what criteria should be used to regulate such trading Should procedures be developed to facilitate claims dataThe CLLA believes that this issue should receive top priority (no additional details are provided).
NBRC-
0303
Comm.
Law
League
of
America
Comm.
Law
League
of
America
(CLLA)



The Commerical Law League of America believes that the following issue should be considered by the NBRC: Should the court's power to change the composition of creditor's committees and review the decisions of the U.S. Trustee be restoredThe CLLA believes that this issue should receive top priority (no additional details are provided).
NBRC-
0303
Comm.
Law
League
of
America
Comm.
Law
League
of
America
(CLLA)



The Commerical Law League of America believes that the following issue should be considered by the NBRC: What rules should govern the courts' jurisdiction over the administrative affairs of a reorganized debtor Under what circumstances should plan modification be permittedThe CLLA believes that these issues should receive moderate priority (no additional details are provided).
NBRC-
0303
Comm.
Law
League
of
America
Comm.
Law
League
of
America
(CLLA)



The Commerical Law League of America believes that the following issues should be considered by the NBRC, "but without a predisposition": Should limitations on serial chapter 11 filings be imposed If so, should serial filings be limited to consensual cases and liquidationsThe CLLA believes that these issues should receive top priority (no additional details are provided).
NBRC-
0303
Comm.
Law
League
of
America
Comm.
Law
League
of
America
(CLLA)



The Commerical Law League of America believes that the following issue should be considered by the NBRC: Do the current rules adequately limit exclusivity to file a plan of reorganization Should exclusivity periods be more or less restrictive Would a standard for exclusivity rather than a time-based rule be more effective What steps can be taken to get chapter 11 cases concluded more quicklyThe CLLA believes that these issues should receive moderate priority (no additional details are provided).
NBRC-
0303
Comm.
Law
League
of
America
Comm.
Law
League
of
America
(CLLA)



The Commerical Law League of America believes that the following issue should be considered by the NBRC: Should § 365 be amended to clarify the effect of "rejection" Should the courts be given specific authority to exercise more procedural control over debtors' decisions to assume or reject contracts What duties should be imposed on the non-debtor party to an executory contract pending assumption or rejectionThe CLLA believes that these issues should receive top priority (no additional details are provided). Discussion of these issues should include clarification of § 365 as to the definiation of an executory contract.
NBRC-
0303
Comm.
Law
League
of
America
Comm.
Law
League
of
America
(CLLA)



The Commerical Law League of America believes that the following issue should be considered by the NBRC: Should industry specific legislation which has been added to the Bankruptcy Code since 1978 be repealed in order to reestablish the historic evenhandedness of commercial law statutes Also, should "straight liquidations" (i.e. chapter 11's filed with initial intent to liquidate) be allowed under chapter 11 Should the Bankruptcy Code be amended to increase meaningful participation by the unsecured creditor body Should there be a good faith requirement for filing of chapter 11 casesThe CLLA believes that the issue of industry specific legislation should receive top priority. The CLLA has consistently opposed industry specific legislation and believes that the NBRC should reexamine the Code with an eye towards reestablishing the balance.
NBRC-
0303
Comm.
Law
League
of
America
Comm.
Law
League
of
America
(CLLA)



The Commerical Law League of America believes that the following small business issues should be considered by the NBRC: 1) How can reorganization under the Code be more effective, inexpensive and expeditious for small businesses Should small businesses have a "fast track" where absolute priority, disclosure and committee appointment requirements are eased Consideration of these issues should be based on the underlying premise that these efficiencies need to be accomplished without sacrificing the rights of the parties, other than the debtor, who are interested and involved in the bankruptcy (CLLA believes these issues should receive high priority). 2) What procedures would dispose of small business cases that do not have a reasonable chance ot reorganization ("non-priority" issue).The CLLA believes that, with regard to procedures that would dispose of small business cases that do not have a reasonable chance ot reorganization, adequate mechansims already exist to deal with business cases that do not have a reasonable chance of reorgnization.
NBRC-
0303
Comm.
Law
League
of
America
Comm.
Law
League
of
America
(CLLA)



The Commerical Law League of America believes that the following partnership issues should be considered by the NBRC: 1) Is a partnership agreement an executory contract (CLLA believes this issues should receive high priority; no additional details are provided) 2) Does the trustee exercise the rights of partners who are debtors or are those rights reserved to the debtor ("high priority" issue). 3) Are clauses automatically converting a general partner's interest to a limited partnership enforceable in bankruptcy Are clauses compelling the sale of the bankrupt partner's interest enforceable ("high priority" issue) 4) Under what circumstances may the bankrupt court stay creditor actions against non-debtor partners for their liability for partnership debts Are there differences during the pendency of the case and after a plan is confirmed and the case is closed ("high priority" issue) 5) Should the bankruptcy court have the power to prohibit general partners of the bankruptcy partnership from transferring non-partnership assets during the pendency of the case ("high priority" issue) 6) Should the bankruptcy court have the power to compel non-debtor general partners to disclose information about their financial condition Should this information be sealed ("high priority" issue) 7) What rights should the chapter 7 trustee have against general partners What rights should the chapter 11 estate have against the partners ("high priority" issue) 8) Should non-partnership creditors have priority over partnership creditors as to non-partnership assets of general partners who are in bankruptcy, or who are in bankruptcy ("high priority" issue) 9) Should § 1111 be calrified to provide that conversion of non-recourse debt to recourse debt does not create general partner liability on such debt ("high priority" issue) 10) Should the Code authorize creation of committees of partners ("high priority" issue) 11) What is the status of new partners, fomer partners, special partners and partners by estoppelThe issue of the status of new partners, fomer partners, special partners and partners by estoppel should be a "non-priority" because it is much too broad and probably could never be addressed effectively by statutory enactment.
NBRC-
0303
Comm.
Law
League
of
America
Comm.
Law
League
of
America
(CLLA)



The Commerical Law League of America believes that the following small issue should be considered by the NBRC: Are statutory amendments needed with regard to LLP's and limited liability companiesThe CLLA believes that this issue should be a "non-priority" because it is probably so intertwined with state law considerations that "it would not be a wise investment of the resources of the Commission."
NBRC-
0303
Comm.
Law
League
of
America
Comm.
Law
League
of
America
(CLLA)



The Commerical Law League of America believes that the following issues should be considered by the NBRC: What priority, if any, should the claims of the PBGC be entitled to upon termination of an insured plan To a lien recognized in bankruptcy What should be the role of the PBGC in participating in a reorganization caseThe CLLA believes that these issues should receive high priority (no additional details are provided).
NBRC-
0303
Comm.
Law
League
of
America
Comm.
Law
League
of
America
(CLLA)

1113
The Commerical Law League of America believes that the following issue should be considered by the NBRC: What has been the impact of § 1113 on collective bargainning agreementsThe CLLA believes that this issue should receive "high priority."
NBRC-
0303
Comm.
Law
League
of
America
Comm.
Law
League
of
America
(CLLA)



The Commerical Law League of America believes that the following environmental issues should be considered by the NBRC: 1) Should "claim" include an injunction which prohibits future violations of environmental laws (CLLA believes that this issue should receive "high priority") 2) What rules should govern retention and sale of remediated property (CLLA believes that this issue should receive "high priority") 3) If funds are expended post-petition to clean-up property contaminated pre-petition, should such a claim be entitled to administrative expense priority (CLLA believes that this issue should receive "high priority") 4) What effect should the automatic stay have on environmental claims (CLLA believes that this issue should receive "high priority") 5) How should the existence of co-obligers with resources affect the estimation and allowance of claims against the estate Should non-debtor parties who have disbursed remidation costs have subrogation rights agaisnst the debtor (CLLA believes that this issue should receive "high priority")No additional details are provided.
NBRC-
0303
Comm.
Law
League
of
America
Comm.
Law
League
of
America
(CLLA)

505(a)
The Commerical Law League of America believes that the following tax issues should be considered by the NBRC: 1) Should traceable payments of trust fund taxes to segregated funds be immunized from voidable perference recapture (CLLA believes that this issue should receive "high priority") 2) Should the list of exceptions to the anti-injuction provisions of the Internal Revenue Code be amended to incorporate Bankruptcy Code § 505(a) (CLLA believes that this issue should receive "high priority") 3) Should § 505(a) be amended to empower the bankruptcy court to enjoin the IRS from collecting trust fund taxes from responsible persons if this injunction would aid rehabilitation of the debtor, or to permit the debtor to allocate payments under the plan (CLLA believes that this issue should receive "high priority") 4) What effect should the automatic stay have on environmental claims (CLLA believes that this issue should receive "high priority") 5) How should the existence of co-obligers with resources affect the estimation and allowance of claims against the estate Should non-debtor parties who have disbursed remediation costs have subrogation rights agaisnst the debtor (CLLA believes that this issue should receive "high priority")No additional details are provided.
NBRC-
0303
Comm.
Law
League
of
America
Comm.
Law
League
of
America
(CLLA)



The Commerical Law League of America believes that the following sovereign immunity issue should be considered by the NBRC: 1) What statutory changes, if any, are required to ensure that § 106 provisions are consistent with the recent Supreme Court decision in the Seminole Indian case (CLLA believes that this issue should receive "high priority")No additional details are provided.
NBRC-
0303
Comm.
Law
League
of
America
Comm.
Law
League
of
America
(CLLA)



The Commerical Law League of America believes that the following chapter 9 issues should be considered by the NBRC: 1) What prior authorizations should a municipality have to file for bankruptcy relief, and should there be more hurdles for low-debt municipalities (CLLA believes that this issue should receive "high priority") 2) Should the protections now accorded to pledged special revenues be expanded or contracted (CLLA believes that this issue should receive "high priority")No additional details are provided.
NBRC-
0303
Comm.
Law
League
of
America
Comm.
Law
League
of
America
(CLLA)



The Commerical Law League of America believes that the following mass torts issues should be considered by the NBRC: 1) Is the bankruptcy system the appropriate forum in which to process mass tort obligations (CLLA believes that this issue should receive "high priority") 2) Should future claimants be dealt with in bankruptcy reorganizations and liquidations (CLLA believes that this issue should receive "high priority") 3) Should tort victims' claims be given priority over other unsecured claims, secured claims, or administrative claims (CLLA believes that this issue is a "non-priority") 4) Should punitive damages receive a lower priority repayment than compensatory tort claims and contract-based claims (CLLA believes that this issue is a "non-priority") 5) Should the Bankruptcy Code specifically authorize "ride-through" for the claims of future tort victims that are not dealt with in a bankruptcy proceeding (CLLA believes that this issue should receive "high priority") 6) The CLLA states that additional issues that should be considered by the NBRC are: effect of § 1123 (priority issue), channeling injunctions to bring in insurance proceeds (moderate priority), multi-district litigation (priority), aggressive creditors who force liquidation (priority), and preservation of going-concerns (priority).No additional details are provided.
NBRC-
0303
Comm.
Law
League
of
America
Comm.
Law
League
of
America
(CLLA)



The Commerical Law League of America believes that the following conflicts issues should be considered by the NBRC: relaxing and/or narrowing disinteredness standards (CLLA believes that this issue should receive "high priority"); definitions of "professionals," advisors, lobbyists, and surveyors (high priority issue); waiver of disinteredness requirements (moderate priority); effect of potential versus actual conflicts (high priority); whether Bankruptcy Rules supersede local regulations (high priority); conflicts with regard to application to the engagement and compensation of professionals (high priority); whether one professional can represent multiple parties (high priority); and whether disqualification of individuals disqualifies their firms (high priority).No additional details are provided.
NBRC-
0303
Comm.
Law
League
of
America
Comm.
Law
League
of
America
(CLLA)



The Commerical Law League of America believes that the following fees & costs issues should be considered by the NBRC: criteria for approval of compensation, routine hold-backs, lodestars, and other compensation schemes (CLLA believes that this issue should receive "high priority"); whether requirements for local counsel drive up costs (high priority); and creditors' obligations to reduce costs imposed on the bankruptcy estate (non-priority).No additional details are provided.
NBRC-
0303
Comm.
Law
League
of
America
Comm.
Law
League
of
America
(CLLA)



The Commerical Law League of America believes that the following U.S. Trustee issues should be considered by the NBRC: administrative duties and role of the U.S. Trustees (CLLA believes that this issue should receive "high priority"); and whether U.S. Trustees adequately monitor chapter 7 and chapter 13 trustees (high priority).No additional details are provided.
NBRC-
0303
Comm.
Law
League
of
America
Comm.
Law
League
of
America
(CLLA)



The Commerical Law League of America believes that the following ancillary proceedings issues should be considered by the NBRC: whether current transNat'l.insolvency law is adequate (CLLA believes that this issue is a "non-priority"); whether legislative adjustments to alter the interNat'l.reach of domestic bankruptcy legislation are needed (non-priority); whether avoiding powers should have extra-territorial effect (moderate priority); clarification of where comity is apporpriate (non-priority); upon release of the reports from the TransNat'l.Insolvency Project, the Committee J Concordat, and the UNCITRAL, what legislative enactments will be required (non-priority until specifics of the reports are known); review provisions for cross-border cases (non-priority); and whether Congress should puruse other avenues in developing a coherent law of transNat'l.bankruptcies.CLLA concludes that § 304 is adequate to address transNat'l.insolvency issues. Legislative adjustements to extend the reach of domestic bankruptcy law are not needed because reciprocity and access to courts in foreign jurisdictions is more effective. Futher, comity is already well-defined and need not be addressed further by the NBRC. With regard to cross-border cases, very few judges have the expertise to handle these cases, and thus training programs will be necessary if special review provisions are enacted.
NBRC-
0304
Arthur J. SpectorBank-
ruptcy
Judge
(E.D. Mich.)
Copy
of
opinion
from
In
re
Dow
Corning
Corp.
522,
523,
1102,
547

Bankruptcy Code has too many areas of "free-floating seat-of-the-pants 'equity' decisions." Specific areas where the Code does not provide enough structure are: (1) determination of what is "disposable income"; (2) determination of "undue hardship" in § 523(a)(8); (3) the "pseudo-disposable income test found in §§ 522(d)(11)(B), (C), (D), (E) and the new § 523(a)(15)(A)"; (4) matrimonial bankruptcy litigation; (5) § 1102 contains a statutory gap, where there is no statutory direction as to whose is responsible for replacing members of official comittees whey they resign, die, etc., or to remove a creditor from a committee when the need is demonstrated (the author attaches a copy of an opinion from In re Dow Corning Corp., Case No. 95-20512, March 21, 1996, illustrating this point); (6) pre-bankruptcy planning; (7)existence of the "new value exception" in chpater 11 camdowns; (8) classification issues; (9) determination of whether value is "new" under § 547(c)(4); (10) numerous questions under § 365; (11) allocation of protection payments; and (12) valuation of assets under chapters 12 and 13.Bankruptcy Code shold be amended to provide more structure for Bankruptcy Judges.
NBRC-
0304
Arthur J. SpectorBank-
ruptcy
Judge
(E.D. Mich.)
Copy
of
opinion
from
In
re
Dow
Corning
Corp.


Chapter 13 contains unclearand incomplete statutory directives, resulting in "chaos" in the law of chapter 13. One of the most "mischevious" portions of reorganization law generally, and chapter 13 specifically, is the clause in § 1327(b) about "the confimrationof a plan vest[ing] all of the property of the estate in the debtor."A subcommitee should be created to rework chapter 13 from top to bottom, strarting from scratch.
NBRC-
0304
Arthur J. SpectorBank-
ruptcy
Judge
(E.D. Mich.)
Copy
of
opinion
from
In
re
Dow
Corning
Corp.


While the author has no strong opinion in the wisdom of having Bankruptcy Appelalte Panels, he suggests that better staffing of the panels would dispel much of the criticism they have drawn.In order to address institutional and constitutional concerns, the Bankruptcy Appellate Panels should consist of two Article III juducial officers (either a district judge and a circuit judge or two district judges) together with one bankruptcy judge. Every order the Panel issues should require at least two votes. The presence of the Article III judge will give the orders precedential effect, and the Bankruptcy Judge will contribute expertise.
NBRC-
0304
Arthur J. SpectorBank-
ruptcy
Judge
(E.D. Mich.)
Copy
of
opinion
from
In
re
Dow
Corning
Corp.


Current appellate process is flawed because (1) in small cases, parties rarely have the financial wherewithal or amount at stake to proceed through two trials and two appeals, and (2) by the time a second appeal is concluded, important events could either moot the appeal or be substantially delayed at great prejudice to the litigants or other parties in interest.The author also supports the creation of direct appeal to the Courts of Appeals.
NBRC-
0304
Arthur J. SpectorBank-
ruptcy
Judge
(E.D. Mich.)
Copy
of
opinion
from
In
re
Dow
Corning
Corp.


Special interest legislation, in particular the removal of personal injury and wrongful death claims from the jurisdiction of the bankruptcy courts, despoil the Code. No real bankruptcy policy justifies this removal, which has resuled in a jurisidictional nightmare in the "mega-cases."Special interest legislation, in particular the jurisdictional provisions for personal injury and wrongful death claims, should be repealed.
NBRC-
0304
Arthur J. SpectorBank-
ruptcy
Judge
(E.D. Mich.)
Copy
of
opinion
from
In
re
Dow
Corning
Corp.
362
In most if not all cases, determinations about whether an automatic stay is in effect in a particular circumstance should be made by the Bankruptcy Courts. Too often, state and federal judges who are unhappy about a bankruptcy case interfering with their docket declare that a bankruptcy stay does not apply to a lawsuit pending before them. Frequently, these decisions are poorly considered.NBRC should further study the issue of which courts should determine the applicability of a bankruptcy's automatic stay.
NBRC-
0305
John E. AcuffAttorneyCover
letter
from
Senator
Fred Thompson
enclosing
this
letter
from
a
constituent


Author represents a small Tennessee company who is a creditor in the chapter 11 case of a Texas debtor. The author complains that his clients cannot participate in the bankruptcy because they cannot afford to litigate in such a distant venue.Bankruptcy Code should be amended so that creditors who cannot afford the expense of participating in bankruptcies filed in distant venues are not altogether prevented from partcipating in the bankruptcy.
NBRC-
0306
Michael T. HertzAttorneyArticle
entitled
"Cutting
Administrative
Expenses
in
Chapter
7
Bankruptcy"


Author attaches an article that he will be submitting to the San Francisco Daily Journal entitled "Cutting Administrative Expenses in Chapter 7 Bankruptcy." In the article, the author argues that the current method for determining chapter 7 trustee fees, which calculates fees case-by-case rather than globally as in chapters 12 and 13, has "profound... impact," and "bear[s] re-examination." This approach, he argues, results in lower returns to creditors and administrative inefficiencies.Author suggests that in chapter 7, as in chapters 12 and 13, each estate should be charged a maximum fee based on distributions through the estate. A panel of chapter 7 trustee's global fees and expenses should be capped in a manner analagous to that of the standing chapter 13 trustee. Moreover, the fees and expenses of certain of the trustee's professionals--particularly accountants and attorneys, who services may be required in non-asset as well as asset cases--be paid from the global pool of revenue generated by all of the chapter 7 trustee's cases.
NBRC-
0307
Leon S. FormanOn
behalf
of the
American
College
of
Bankruptcy
(ACB)
"Revised
Summary
of
College
Positions,"
and
names
and
addresses
of
ACB
focus
group
members


ACB concludes that: 1) The Bankruptcy Code of 1978 as amended is generally working well and no major overhaul is necessary or desirable. 2) Local rules are applied inconsistently throughout the coutry, and in some districts burdensome additional procedures are imposed, thereby increasing the cost of a bankruptcy case.ACB recommends that: 1) The only amendments to the Code that are required at this time are the consideration of changes and remedies for specific problems. 2) With regard to local rules, a statement of policy and direction from the Advisory Committee on Bankruptcy Rules is needed, including a flexible Model Uniform Local Bankruptcy Rule.
NBRC-
0307
Leon S. FormanOn
behalf
of the
American
College
of
Bankruptcy
(ACB)
"Revised
Summary
of
College
Positions,"
and
names
and
addresses
of
ACB
focus
group
members


ACB concludes that giving Bankruptcy Judges Article III status would at least eliminate the core and non-core issues and would resolve the current problems related to jury trials in bankruptcy cases. Issues related to the change in status for sitting judges should be resolved through legislation.ACB recommends that ideally Bankruptcy Judges should be appointed under Article III, which would should make the system function more effectively.
NBRC-
0307
Leon S. FormanOn
behalf
of the
American
College
of
Bankruptcy
(ACB)
"Revised
Summary
of
College
Positions,"
and
names
and
addresses
of
ACB
focus
group
members


ACB concludes that two levels of appeal in bankruptcy proceedings of final orders as of right lead to delay in achieving a final resolution of disputes as well as increased costs. In addition, because an appellate decision by a district judge is not binding precedent, the same issues are constantly being relitigated.ACB recommends that direct appeal from the Bankruptcy Court be created, thereby eliminating the intermediate appeal to the District Court. If intermediate appeal is to be retained, Bankruptcy Appellate Panels (BAP's) consisting of bankruptcy judges should be mandatory in every circuit. If a BAP is made mandatory, the legislation should provide that a BAP decision is binding precedent upon bankruptcy judges in that circuit.
NBRC-
0307
Leon S. FormanOn
behalf
of the
American
College
of
Bankruptcy
(ACB)
"Revised
Summary
of
College
Positions,"
and
names
and
addresses
of
ACB
focus
group
members


ACB concludes that the Code provision imposing a strict per se test of disinteredness is "not working well" as applied to the employment of professionals by debtors-in-possession in chapter 11 cases.ACB recommends the elimination of the per se test of disinteredness as applied to the employment of professionals by debtors-in-possession in chapter 11 cases. Instead, professionals should be required only to meet the standard of having no materal adverse interest. Specific statutory guidelines should be created to enforce uniformity of ethical conduct in these situations. Also, the Code and Rules should be amended to adopt a nationwide rule relating to practice before the bankruptcy court, thereby eliminating the formality of pro hac vice motions.
NBRC-
0307
Leon S. FormanOn
behalf
of the
American
College
of
Bankruptcy
(ACB)
"Revised
Summary
of
College
Positions,"
and
names
and
addresses
of
ACB
focus
group
members


ACB concludes that chapters 7 and 13 operate by judicial process and not by an adminiatrative system because (1) many administrative duties have already been moved from the court to the U.S. Trustee, (2) under these chapters, judicial attention or decision making is frequently required at some stage of the case and thus a completely separate administrative system would unnecessarily load the process with additional expense, and (3) the discharge is of such significance that it should be considered by a court.ACB opposes the proposal of an administrative system for chapters 7 and 13.
NBRC-
0307
Leon S. FormanOn
behalf
of the
American
College
of
Bankruptcy
(ACB)
"Revised
Summary
of
College
Positions,"
and
names
and
addresses
of
ACB
focus
group
members


ACB concludes that chapter 11 is working reasonably well and does not require structural change. Its best attribute is flexibility. Exclusivity, eligibility, small business and other provisions are working reasonably well.ACB feels that chapter 11 does not require structural change. As to the eligibility of insurance companies, further study is warranted.
NBRC-
0307
Leon S. FormanOn
behalf
of the
American
College
of
Bankruptcy
(ACB)
"Revised
Summary
of
College
Positions,"
and
names
and
addresses
of
ACB
focus
group
members


U.S. Trustee system is not working well and needs reexamination. Conduct of the U.S. Trustees is not uniform or consistent geographically. In chapter 11, U.S. Trustees should restrict their activities to cases where no active creditors' committee exists but in all cases should advise the court with respect to fee applications. Also, some bankruptcy estates are being charged a surcharge that is greater than the amount required to support the bankruptcy system This practice is perceived as unfair and overtaxes the participants.ACB concludes that a strong set of guidelines should be prescribed by the Nat'l.Office of the U.S. Trustee, and the Office should closely montior whether these guidelines are being followed.
NBRC-
0307
Leon S. FormanOn
behalf
of the
American
College
of
Bankruptcy
(ACB)
"Revised
Summary
of
College
Positions,"
and
names
and
addresses
of
ACB
focus
group
members


ACB concludes that mediation and alternative dispute resolution procedures have been helpful in many districts and bear further consideration.ACB recommends that mediation and alternative dispute resolution be encouraged and developed in the bankruptcy system, although at present not enough is known about this field to jusitfy adoption of statutory or procedural rules.
NBRC-
0308
James R. Covington IIIDir.,
llinois
State
Bar
Assoc.
Proposal
from
the
Illinois
State
Bar
Assoc.'s
Comm.,
Banking,
and
Bankruptcy
Law
Section
Council,
contained
in
letter
dated
3/19/96
from
Michael
J.
Chmiel
523
On occasion, an attorney representing a chpater 7 debtor will agree to take payments over a period of time which goes beyond the filing of a voluntary petition in bankruptcy. Technically, the obligation which accrued prior to the filing of the bankruptcy case is discharged in bankruptcy unless the debtor agress to reaffirm the same. Negotiating with the client is awkward at best. A recent district court case in Arizona confirmed this analysis.Section 523(a) should be amended to make these types of attorneys fees non-dischargeable in bankruptcy. Suggested statutory language is provided.
NBRC-
0309
Beth
Wiggins
Federal
Juducial
Center,
Research
Div.
Survey
on
the
United
States
Trustee
Program
(Februaryv1996)


Author attaches a copy of a questionniare that was distributed by the Federal Judicial Center and the Bankruptcy Judges Division in the Administrative Office to bankruptcy judges, bankruptcy clerks, chapter 7 trustees, and chapter 13 trustees. The quentionnaire is designed to elicit constructive suggestions about the U.S. Trustee program. The questionnaire has been distributed that the Subcommittee on Estate Administration and staff are now reviewing responses received to date.None.
NBRC-
0310
InterNat'l.
Swaps
and
Derivative
Assoc., Inc.
and
Public
Securities
Assoc.
InterNat'l.
Swaps
and
Derivative
Assoc.,
Inc.
("ISDA"),
and
Public
Securities
Assoc.
("PSA")

106,
107,
108,
109,
110,
362,
563

In this position paper entitled "Financial Transactions in Insolvency: Reducing Legal Risk Through Legislative Reform," the ISDA and the PSA discuss the enforceability of termination, netting and foreclosure on collateral provisions under the Bankruptcy Code and the Federal Deposit Insurance Act ("FDIA"). They highlight problems and inconsistencies under the Code and the FDIA, and describe how netting has a systemic effect that is intertwined with bankruptcy regulations. For example, a bankruptcy court stay against the liquidation of securities can result in uncertainty and the potential inability of a party to finance the securities it has purchased or that have been pledged to it, which could result in gridlock and a chain of insolvencies. The Code and the FDIA need to be amended to clarify how these issues should be addressed and to recognize the unique concerns implicated in insolvency transactions.The ISDA and PSA suggest legislative amendments that would minimize the risk of dispurtion within or between financial markets upon the insolvency of a participant in those markets. Specific statutory language is provided.
NBRC-
0311
Samuel L. BuffordBankruptcy
Judge
(C.D.
Cal.)

362(b)(4)
The proposed amendment to § 362(b)(4) presents two problems: (1) The proposed revision would substantially magnify the problem that arises when a government agency invokes this provision to terminate a license or to destroy debtor's property without a court hearing, namely that the burden of going to court for relief is shifted from the creditor to the debtor and that notice to other affected creditors is eliminated; (2) If the government unit is part of state government, the proposed amendment would allow the government unit to use the Eleventh Amendment to avoid a bankruptcy court's jurisdiction, and the court would be powerless to control prejudice to other creditors resulting from the government's appropriation of property belonging to the estate.Author opposes the proposed amendment to § 362(b)(4), and recommends that where government action would have a substantial impact on the value of a debtor's business, the automatic stay should apply. Affected creditors should be given notice, and the court should have an opportunity to balance the interests of all parties before permitting the government to take action that destroys substantial value belonging to the estate.
NBRC-
0312
John B. Scott, Jr.AttorneyCover
letter
from
Senator
Howard
Heflin,
enclosing
this
letter
from
his
constituent


Current provisions governing how nationwide jurisdiction is conferred for preference claims give undue advantage to chapter 7 trustees and chapter 11 debtors-in-possession. Creditors often settle for a relatively modest percentage on their preference claim in order to avoid the time and expense of having to defend a case in somebody else's "briar patch."In the ongoing efforts to achieve the proper balance between debtor and creditor, some consideration should be given toward putting the parties on more equal footing with regard to nationwide jurisdiction.
NBRC-
0313
Joseph L. DonofroArchitect,
Donofro
and
Assoc.
Cover
letter
from
Senator
Howard
Heflin,
enclosing
this
letter
from
his
constituent


Debtors often use bankruptcy simply to escape financial obligations. Many times, debtors can afford to pay off at least of portion of their debts, but use the bankrtupcy system to avoid any repayment.Bankruptcy Code should be amended to require debtors who have filed for bankruptcy to appear before the court every two or three years to produce tax returns and be evaluated as to their ability to repay their obligations. If the debtors are able to afford repayment, the Bankruptcy Judge should be able to order such repayment, with interest.
NBRC-
0314
Peter F.
Geraci
Bankruptcy
attorney
Summaries,
a
letter,
and
a
decision
from
a
case
discussing
payments
of
bankruptcy
attorneys
over
time


"No money down" practitioners, who do not collect their fees before filing, are violating at least one statute. Some pratitioners even lend their clients the $175 filing fee. This practice presents obvious legal and ethical problems, and should not be permitted. Some of these practitioners may ask the NBRC to consider an amendment which would provide an exception for debtors' attorneys fees. This request should be denied because there is not "access to the courts" problem that requires an exception for dischrage for debtors' attorneys fees. Author attaches two summaries of a case that discusses payments of attorneys over time, a letter to a co-editor of a newsletter discussing this case, and a copy of the decision from the case.Opposes any amendment to the Code that would provide an exception for discharge for debtors' attorneys fees, or that would in any other way permit debtors' attorneys to make "no money down" filings.
NBRC-
0315
Paul
Mignini, Jr.
and
Gary
White
President,
Nat'l.
Assoc.
of
Credit
Management
("NACM"),
and
Chairman.
NACM
Government
Affairs
Committee,
respectively



The proposed definition of small business as a business with less than $10 million in net income would effectively allow for over 90% of all non-consumer filings to qualify for expedited treament. The definition should be narrowed so that only true small businesses are entitled to such treatment.Small business should be defined not be by income, a figure which is easily manipulated, but by the amount of debt, a figure which more accurately represents the debtor's financial position.
NBRC-
0315
Paul Mignini, Jr. and Gary WhitePresident,
Nat'l.
Assoc.
of
Credit
Management
("NACM"),
and
Chairman.
NACM
Government
Affairs
Committee,
respectively



NACM believes that the time frame for the filing of a plan by a small business debtor must be viewed in relationship to the availability of extensions on the period of exclusivity for the debtor. While the proposed 45 day period for filing a plan is too short, NACM remains equally concerned that the ability of the debtor to secure extensions of the exclusivity period leads to abuses of the bankruptcy system.NACM recommends that the time in which small businesses can file a plan should be kept to 120 days, and that no extensions be granted. Failure to meet this deadline should allow the creditors to either liquidate the business or dismiss the case.
NBRC-
0316
Comm.
Law
League
of
America
Comm.
Law
League
of
America ("CLLA")
Copies
of
survey
responses


The CLLA presents the "Results of An Empirical Study: Impact of Potential Capital Gain Taxes on Sale of Assets in Bankruptcy Cases." The CLLA concludes that potential capital gains taxes are forcing chapter 7 bankruptcy trustees to abandon tens of millions of dollars of assets. The study revealed that over the last four years at least $78 million was unavailable for distribution from the estates of bankrupt debtors because the impact of capital gains taxes prevented trustees from selling thousands of pieces of real property. As a result, creditors are being deprived of a source of funds from which they could recoup some portion of the billions lost each year to bankrupt debtors. Results of the study and the concerns it raises are discussed in detail, and copies of each completed survey are attached.The CLLA's survey studied possible solutions to this problem. Survey respondents ranked several suggested solutions as follows: (1) allow a trustee a "stepped up basis" in the property similar to that which exists with the transfer of assets upon death; (2) exclude an amount of capital gains from the estate's taxable income. Based on this study, the CLLA recommends that the Internal Revenue Code be amended to provide for a stepped up basis for chapter 7 bankruptcy estates when the trustee sells capital assets.
NBRC-
0317
Trevor A. GrimmGeneral
Counsel,
Apartment
Assoc.
of
Greater
Los
Angeles
Documents
discussing
and
illustrating
tenant-
debtor
abuse
of
the
automatic
stay
362
Bankruptcy fraud related to eviction actions is rampant in Southern California and a problem in other states. "Evicted" tenants, sometimes at the urging of debtor attorney "petition miils," file or end up the named filer of fake Bankruptcy petitions filed solely for the purpose of obtaining the eviction-delay benefit of the Bankruptcy Code's automatic stay. The author attaches and number of reports, articles, statements, decisions, court documents, copies of statutory provisions, and other documents that discuss and illustrate this problem.Bankruptcy Code should be amended to prevent abuse of the automatic stay and otherwise eliminate the multi-million dollar annual loss sustained by residential property owners who fall victim to tenants who abuse the stay.
NBRC-
0318
Paul Mignini, Jr., Mary E. Wysocki and Charles M. TatelbaumPres.,
Nat'l.
Assoc.
of
Credit
Management
("NACM"),
Chair,
NACM
Government
Affairs
Committee,
and
NACM
Legislative
and
Bankruptcy
Counsel,
respectively

547
NACM sought the input of all NACM members with respect to proposed changes to the bankruptcy laws. The NACM Government Affairs Committee, without discussing the rationales for their suggestions, prepared the proposals below.NACM's Government Affairs Committee concludes that § 547 should be amended to provide: (1) in the event of a recovery of an avoidable preferential transfer by a debtor-in-possession under chapter 11, the proceeds shall initially be placed into a separate interest-bearing escrow account which may be used only to satisfy the claims of creditors in the same class from which the proceeds were received; (2) when dealing with the avoidance of a preferential transfer, and the transfer in question is made by check in payment of an antecedent debt, the transfer shall be deemed to have been made and effected on the date the transferee deposits the check; (3) the term "made according to ordinary business terms" shall include a course of dealing between the debtor and the creditor for a period not to exceed one year prior to the transfer in question, and the bankruptcy court may use practices that are consistent and relevant as a basis for defining this term; contractual terms shall be used only in the absence of a pattern of practice.
NBRC-
0318
Paul Mignini, Jr., Mary E. Wysocki and Charles M. TatelbaumPres.,
Nat'l.
Assoc.
of
Credit
Management
("NACM"),
Chair,
NACM
Government
Affairs
Committee,
and
NACM
Legislative
and
Bankruptcy
Counsel,
respectively

28
U.S.C.
§ 157

NACM sought the input of all NACM members with respect to proposed changes to the bankruptcy laws. The NACM Government Affairs Committee, without discussing the rationales for their suggestions, prepared the proposals below.NACM's Government Affairs Committee concludes that § 157 should be amended to provide: (1) in an action to avoid a preferential transfer where the amount of the transfer is $3,000 or less, the adversary proceeding may be only commenced in a Bankruptcy Court in a district where the transferee maintains a regualr place of business.
NBRC-
0318
Paul Mignini, Jr., Mary E. Wysocki and Charles M. TatelbaumPres.,
Nat'l.
Assoc.
of
Credit
Management
("NACM"),
Chair,
NACM
Government
Affairs
Committee,
and
NACM
Legislative
and<