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[ABI Logo] [Legislative Highlights]
Reprinted from July/August 2002 ABI Journal August 1, 2002

Web posted and Copyright © August 1, 2002, American Bankruptcy Institute.

Bankruptcy Bill Update: Hyde/Schumer Continue to Trade Language on Clinic Access

hile some in the Congressional leadership on both sides of Capitol Hill still hope for a resolution of the bankruptcy bill impasse before the month-long August recess, the final issue remains in dispute. Rep. Henry Hyde (R-Ill.) has offered language to make clear that debts would be non-dischargeable if they arose from an intentional blockade that rendered impassable all practical means of access to a clinic. Creditors (such as a health care clinic) would not have to relitigate in bankruptcy court any finding of fact giving rise to the claim. Such claims could arise from violation of court orders or injunctions. However, Sen. Charles Schumer (D-N.Y.) favors alternative language to "intentional blockade" that instead uses the language from the Freedom of Access to Clinic Entrances Act. The FACE Act refers to "obstruct, interfere or intimidate" as the standard to be met for a violation of this federal law. Talks continue at the staff level. Resolution of this issue is the last obstacle to agreement on a conference report on the bankruptcy bill.

Enron-inspired Bills Focus on Fraud, Corporate Bonuses and Employee Wage Claims

A flurry of new legislation has been introduced in the wake the accounting scandals that have upset the financial markets. The "Executive Accountability Act of 2002" (Rep. Matsui, D-Calif.) would amend the Internal Revenue Code to apply a golden parachute excise tax to deferred compensation paid to a corporate executive after a major decline (75 percent) in stock value or a corporation files for bankruptcy (H.R. 5088). The "Corporate and Criminal Fraud Accountability Act of 2002" (Rep. Conyers, D-Mich.) would, among other provisions, disallow the discharge of debts incurred in violation of securities fraud laws (H.R. 4098). This is similar to the Leahy amendment adopted by the Senate in July (see Legislative Update). The "Corporate Reform and Restoration Act of 2002" (Rep. Jackson-Lee, D-Texas) would raise the priority for wage claims from $4,300 to $15,000 per employee (H.R. 5110). The change would apply retroactively to pending cases.

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