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.)

Government: Miscellaneous
Problem ReferencedProposed Solutions
Karen CordryBankruptcy Counsel, National Association os Attorneys General (NAAG)

Bankruptcy Code recognizes the unique position held by government entities as creditors, but there is a continuing debate over the validity of government-related provisions. With recent developments stemming from the decision in Seminole Tribe of Florida v. Florida, No. 94-12 (March 27, 1996), and Merchant's Grain, 64 USLW 3287 (April 15, 1996), much study is needed to reconcile new limits on jurisdiction with other policies in the Bankruptcy Code.NBRC should consider holding at least one meeting to hear testimony and engage in a detailed give-and-take on issues relating to the government's role in bankruptcy proceedings.
Richard H. WalkerGeneral Counsel, Securities and Exchange CommissionDocument entitled "Issues Identified by Division of Enforcement and Office of General Counsel of Securities and Exchange Commission for Consideration by Bankruptcy Review Commission.

Some debtors schedule governmental creditors in a manner calculated to look complete but that is calculated to ensure that any notice will not be correctly routed, such as omitting the name or even division of the attorney known to be handling the case. This can produce huge delays or even a complete failure to reach the appropriate person.The Bankruptcy Rules should specifically require that the debtor schedule the name of the responsible individual at the governmental agency creditor or such identifying information about the case or investigation from which the debt is alleged to arise as is known to the debtor.
Heidi Heitkamp, et al.Attorney General of North Dakota and Chair, Bankruptcy and Taxation Working Group, National Association of Attorneys General; and, Attorneys General of member states.Specific Proposal Recommendations

Letter sets forth four guiding principles which they believe should be applied in making recommendations. These are: 1) As bankruptcy is a privilege given to the debtor, it should be expected to bear the burden of ensuring that creditors receive adequate notice of the case and its effect on their rights; 2) Bankruptcy procedures should be designed to ensure that all legitimate claims are accepted and paid to the greatest extent possible and that creditors are not unreasonably burdened in asserting those rights; 3) Procedures should be designed, as much as possible, to reduce the burden on all participants in the case, not just debtors; and, 4) Bankruptcy should not be a basis for a debtor to avoid its obligations under laws applicable to all entities, particularly not through ad hoc decision-making by bankruptcy courts using their powers under Section 105.An attachment to the letter, entitled "Specific Proposal Recommendations" lists specific proposals under the following headings: 1) Notice to Governmental Entities; 2) Clarification of governmental police and regulatory exceptions - Section 362(b) and 105; 3) Improved Tax Collection and Administration Provisions; 4) Repeal of Section 724(b); 5) National Admission/Local Counsel Rules; and, 6) Revision of Chapter 13 Discharge Provisions. These are dealt with in the following listings under Submission ID NBRC-0610.
Heidi Heitkamp, et al.Attorney General of North Dakota and Chair, Bankruptcy and Taxation Working Group, National Association of Attorneys General; and, Attorneys General of member states.Specific Proposal Recommendations342
Better provisions are needed for notice to governmental entities, and clear guidelines as to consequences for failure to follow the rules.Authors appreciate Commission's endorsement of concept for better provisions governing notice to governmental entities, but believe that the Commission should consider statutory changes that will spell out the substantive consequences to the debtor of failing to abide by the procedural requirements in the Rules.
Heidi HeitkampAttorney General of North Dakota; Chair, Bankruptcy and Taxation Working Group, National Association of Attorneys General

Same as April 11, 1997 letter from same author, filed at NBRC-0610, but with additional authorized Attorney General signatures added.
Chris Quinn-BrintnallSr. Deputy Prosecuting Attorney, Pierce County, Washington

Author recounts a recent Vehicular Assault case involving a fugitive with a fine of $975 who filed bankruptcy in another state and was given a payment plan on the fine so that he could drive a truck. Criminal judgements involving fines are a form of punishment. To allow persons convicted of crimes to avoid punishment simply by filing bankruptcy violates public policy and is dangerous.Change the Bankruptcy Code to preclude a bankruptcy court from changing criminal penalties.
Karen CordryNational Association of Attorneys General (NAAG) Bankruptcy Counsel
101(5), 105, 362, 50328 USC 959"From a governmental perspective, the most fundamental question that the Commission must address is the complex of issues that arise fromt he conflict between the debtor's desire to reorganize and obtain a fresh start and its obligation to obey the law." Author is forwarding a memorandum addressing "the debtor's obligation to obey the law" with reference to the Code sections cited above.
Karen CorddryNational Association of Attorneys General (NAAG) Bankruptcy CounselMemorandum on Remaining Governmental Provisions

Author is forwarding a memorandum dealing with a variety of issues of interest to state governments and dealt with in the proposals of the Government Working Group.See document for proposed solutions for each issue.