Web posted and Copyright © 1/12/98, American
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,
Chapter 11: Eligibility
||Leon S. Foreman
||Scholar-in-Residence - American College of Bankruptcy
- Selective Professional Association of 7, 13 & 11 Attys; Accts;
Professors; Judges * Gov't Officials (Approx. 300 Fellows).
|Should the eligibility requirements for filing a
chapter 11 petition be changed
||No. Focus groups were unanimous in opposing any
change in the eligibility requirements. Ample justification for bankr.
filings involving mass tort, single asset real estate, and other special
situations. No one favors insolvency prerequisite for Ch. 11.
Eligibility of insurance companies requires further study.
||Ely & Company, Inc. - Financial Institutions
||Copy of proposed legislation, two articles discussing
the cross-guarantee concept, synopsis of the proposed legislation, and
the author's vitae/resume
|Author presents a proposal, called the
cross-guarantee concept, that would privatize the regulation, insolvency
risk, and insolvency proceedings of banks and thrifts. This proposal has
been transformed into legislation introduced by Rep. Tom Petri in the
House of Representatives in 1994 as H.R. 5227. Mr. Petri will
reintroduce this legislation in September 1996 and again in the next
Congress. This proposal is based on the premise that privitization of
banking regulation, which in effect shifts these institutions to
contractual, market-driven regulation, has become imperative because
electronic technology (computers and telecommunications) is destroying
the efficacy of traditional government regulation of banks and thrifts.
Under this proposal, the Bankruptcy Courts and Code would be utilized in
resolving insolvent depository institutions now insured by FDIC.
Presently, §§ 109(b)(2) and (d) bar depository instutions ,
including those insured by the FDIC, from being debtors under the
||NBRC should recommend that Congress look favorably
upon the cross-guarantee concept with regard to bankruptcy
||Richard H. Walker
||General Counsel, Securities and Exchange
||Document entitled "Issues Identified by Division of
Enforcement and Office of General Counsel of Securities and Exchange
Commission for Consideration by Bankruptcy Review
|Many of the reorganization provisions of Chapter 11
are not really applicable to individuals, and so there is a clear lack
of standards for such cases. Further, in the case of corporate debtors,
even the most hopeless debtor usually is given at least one chance, and
often more, to reorganize before the case is converted to Chapter 7,
causing the estate to be consumed by administrative expenses and leaving
creditors worse off.
||The commission should study whether individuals
should be elibible to file chapter 11, and if so, whether eligibility
standards should be promulgated for them. The commission should also
examine whether it is time to adopt eligibility standards for corporate
||Credit Manager, Beeswax Designs
|"Under the current law a company can have equity in
their business and still file Bankruptcy. This makes extending open
credit extremely difficult as we depend on the customer's financial to
establish their credit line."
||"We would suggest that a company be pprohibited from
filing for Bankruptcy without first using the equity of the business to
get outside financing or if a company files with equity a certain part
of that equity be set aside for the unsecured creditors as some form of