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Reprinted from April 2000 ABI Journal April 1, 2000

Web posted and Copyright © April 1, 2000, American Bankruptcy Institute.

  • At press time, House and Senate conferees have not yet been named to the bankruptcy reform conference. Pending is the Senate's resolution on separating the minimum wage and business tax provisions from S. 625. These non-germane provisions were added by floor amendment and passed by the Senate in February. The House has passed its own version on minimum wage and business taxes. The Senate's action to strike the provisions would allow a clean conference on bankruptcy issues alone. An attempt to strike was made on March 22, but failed when Democrats objected. Resolution of this issue is a condition precedent to moving forward with the bankruptcy conference. Staffers continue to work on some of the differences.
  • The U.S. Department of Justice (DOJ) memo dealing with some of the key issues in the S. 625/H.R. 833 conference objects to permitting family farmers to allow some or all of the tax liability arising from sales in chapter 12 to be discharged as unsecured debt. "It would be undesirable to begin creating exceptions for special interest groups," wrote the DOJ. Bill sponsor Sen. Charles E. Grassley (R-IA) attacked the characterization of family farmers as special interests. He pointed out that sales of property are typical in farm cases and that to saddle farmers with heavy tax liability would undermine bankruptcy's promised fresh start.
  • ABI member Janet M. Nesse (Morrison & Hecker; Washington) recently participated in a briefing for House and Senate staff. A commercial bankruptcy practitioner and trained bankruptcy mediator, Nesse was invited by the staff to assist in the negotiations between retailers, banks and shopping center interests over proposed changes to leases under §365, which sharply limit the ability of debtors to delay the decision to accept or reject.

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