| ID |
Name |
Group |
Other |
Code
Sec |
Cross
Ref |
Problem Referenced |
Proposed Solutions |
| NBRC-0019 |
Morten S. Beyer |
President; Morten Beyer and Associates; "Reforming
the Bankruptcy Act," V.2 No. 7 MBA Aviation Oracle (Nov. 1995)(citing
Michael K. Lowry, "Air Watch Report"). |
|
|
|
The U.S. Bankruptcy Laws are designed to give
management every opportunity to retain control and reorganize as
debtors-in-possession. This has not worked well. Braniff, Continental,
and TWA all went through bankruptcy twice. The bankruptcies of Eastern,
Pan Am, Braniff, and others demonstrate the it was the creditors the
paid the price of incompetent management. |
The British system, which puts the bankrupt out of
its misery in a matter of days and salvages as much as possible for the
creditors is better--"Get the Foxes Out of the Hen Houses." |
| NBRC-0019 |
Morten S. Beyer |
President; Morten Beyer and Associates; "Reforming
the Bankruptcy Act," V.2 No. 7 MBA Aviation Oracle (Nov.
1995). |
|
|
|
A myriad of lawyers swarm over the carcasses of
bankrupt carriers, growing fat on their liberal fees. |
The quick, surgical British system limits the larval
greed of lawyers and the Commission should consider limiting lawyers in
airline bankruptcies. |
| NBRC-0019 |
Morten S. Beyer |
President; Morten Beyer and Associates; "Reforming
the Bankruptcy Act," V.2 No. 7 MBA Aviation Oracle (Nov.
1995). |
|
|
|
The Bankruptcy Code gives the presiding judge
considerable authority to act decisively and settle matters quickly;
however, this authority is little-used, and week or incompetent judges,
badgered by the lawyers and blinded by the blandishments of
debtors-in-possession trying to hold on for one more month, are no match
for their adversaries. |
The quick appointment of a liquidator would solve
this problem. |
| NBRC-0020 |
Leonard P. Goldberger, Daniel E. Armel, Grant W.
Newton, Alan M. Jacobs |
American Bankruptcy Institute Panel
Discussion |
|
|
|
Critics of the US bankruptcy system argue that too
much time and too many resources are expended in attempts to
rehabilitate businesses whose business theory has become obsolete and
whose assets would be productive if sold to competitors or employed in
unrelated businesses. After years of operationg losses, mounting
administrative costs, and unconfirmable plans, too many cases are
converted to liquidation after almost complete erosion of unsecured
creditor recoveries. |
The Commission should consider whether the bankruptcy
court should be provided with evidence early in the case, from an
independent party (i.e., licensed insolvency officer) considered to be
an officer of the court, that would indicate whether the debtor's
business has a chance to reorganize or whether the business should be
liquidated and the extent to which an early viability assessment will
increase efficiency and avoid the erosion of creditor
recoveries. |
| NBRC-0140 |
Marcia L. Goldstein |
The Association of the Bar of the City of New York,
Chair, Committee on Bankruptcy and Corporate Reorganization |
|
|
|
Although the Association of the Bar of the CIty of
New York generally supports the current operation of Chapter 11, it
recognizes that some cases take too long and cost too much. |
The NBRC should review the roles that bankruptcy
judges and other third parties play in the reorganization pprocess, and
consider whether their more active participation in certain cases should
be more explicitly contemplated by the Code. Furthermore, the NBRC
should review appointmkents of third parties in bankruptcy cases
(including how and when a third party should be appointed and the extent
to which parties in interest should participate in the appointment
process). the possible roles that may be performed by such a third
party, and the bankruptcy court's power to tailor case procedures and
exclusivity orders. |
| NBRC-0178 |
Gary White, on behalf of the Natl. Assoc. of Credit
Management |
Chair, Government Affairs Comm., Natl. Assoc. of
Credit Management |
|
|
|
Debtors' in possession compliance with fiduciary
duties should be carefully monitored. These duties require the DIP to
consider equity among creditors in creating a reorganization plan. The
DIP's counsel should have court oversight to review whether the DIP's
are honoring their fiduciary duties. |
Standards should be established for determining
whether attorneys and other professionals providing services to the DIP
and the estate actually imparted any benefit. This determination should
be used to establish their eligability for compensation. |
| NBRC-0180 |
Marc S. Young |
Disputed Secured Creditor |
|
724(b) |
Rule 7001(2); §§ 550, 551 |
Creditors who extend credit to businesses should be
held accountable for the profits they receive from disreputable
businesses because the creditors are willing participants in the
debtor's exploitation of the public. In order to protect themselves from
disreputable businesses, creditors should be permitted to evaluate the
character of the potential debtor. Also, judicial liens should receive
higher priority than perfected UCC Section 9 secured creditors liens so
that creditors are encouraged to examine the character of potential
debtors. |
Creditors who extend credit to businesses should be
held accountable for the profits they receive from disreputable
businesses because the creditors are willing participants in the
debtor's exploitation of the public. In order to encourage creditors to
examine a debtor's character before extending credit, judicial liens
should receive higher priority than perfected UCC Section 9 secured
creditors liens. |
| NBRC-0181 |
Ann vom Eigen, on behalf of the American Land Title
Association |
Legislative Counsel |
Copy of testimony from 12/96 Open Forum |
362(a)(4) |
549(c) |
Recent Ninth Circuit decision in McConville
incorrectly interprets the language "transfer of real property" and
should be overruled. Thompson v. David Margen and Lowton Associates (In
re McConville), 97 F.3d 316 (9th Cir. 1996). The Court erroneously
concluded that: (1) the phrase "transfer of real property " in 11 U.S.C.
§ 549(c) does not include the transfer of interest in real
property, such as a mortgage or deed of trust, and (2) the automatic
stay in § 362(a) otherwise voids any attempted perfection of a
transfer under § 549(c). No basis exists under the Bankruptcy Code
for treating the term "transfer" in § 549 differently than in
§§ 101(37), 101(43), 101(54), 547 and 548, where "transfer"
unquestionably applies to transfers of interest in property, including
the creation of liens. Contrary to the holding in McConville, the
purpose of § 549(c) is to protect both bona fide purchasers and
bona fide encumbrancers from undisclosed bankruptcies, and consequently
from having their interests in real property invalidated as unauthorized
postpetition transfers under § 549(a). The Ninth Circuit's decision
in McConville puts at risk every lender who extends credit in reliance
on state real property recording acts where debtors' undisclosed
bankruptcies were filed in remote jurisdictions. Because it is
practicably impossible for the title insurance industry to
contemporaneously search bankruptcy filings in 50 states at the time of
loan closing, the McConville decision will force the title industry to
take an exception from its title coverage for the existence of an
undisclosed bankruptcy case. The risk of loss, therefore, would be borne
by the lending industry and may chill the availability of
credit. |
Bankruptcy Code should be amended to abrogate the
decision in McConville and clarify the definition of "transfer of real
property." In particular, the author recommends the following
clarifications: (1) the term "lien" in § 101(37) should be amended
to include encumbrances; (2) the term "purchaser" in § 101(43)
should be amended to include recipients of security interests; (3) the
term "transfer" in § 101(54) should be amended to include creation
of a lien; (4) a new § 102(10) should be added to clarify that
references in the Code to real property, personal property, or fixtures
include reference to interests therein, including liens; (5) §
362(b)(3) should be amended to exempt from the § 362(a) automatic
stay the steps necessary to perfect an interest otherwise intended to be
protected ubder § 549; and (6) a new § 362(b)(19) should be
added to exempt from the § 362(a) automatic stay any postpetition
transfer which is not avoidable under § 549, thereby allowing the
exceptions to §§ 549 (b) and (c) to operate as originally
intended. |
| NBRC-0185 |
Terrance L. Stinnett |
Attorney |
|
|
|
Requiring a status conference only 30 days after the
petition is filed is "probably too soon." In most cases, after this 30
day period, the Schedules and Statements of Affairs has not been filed
yet, a meeting of creditors has not been held, and a creditors'
committee either has not been appointed, or if appointed, has not had an
opportunity to organize and select counsel. The first two or three weeks
of a case are usually devoted to administrative details and cash
collateral issues, and neither counsel nor debtor has time to consider
the details of how the debtor's problems will be resolved. |
Mandatory status conference should be held no earlier
than 60 days after the petition date. |
| NBRC-0189 |
Marcia L. Goldstein, on behalf of NY City Bar Assoc.,
Comm. on Bankruptcy & Corp. Reorganization |
Chair, Comm. on Bankruptcy and Corp.
Reorganization |
|
101(41) |
109 |
Definition of "person" in § 101(41) should
specify whether limited liability companies are considered "persons,"
and thus eligable for debtor relief under § 109. |
In order to eliminate ambiguity as to whether limited
liability companies are eligable to be debtors, the definition of person
in § 101(41) should be amended to specifically include such
companies. The author provides a sample redrafted version of §
101(41). |
| NBRC-0189 |
Marcia L. Goldstein, on behalf of NY City Bar Assoc.,
Comm. on Bankruptcy & Corp. Reorganization |
Chair, Comm. on Bankruptcy and Corp.
Reorganization |
|
1124 |
1122(b) |
The 1994 amendment to § 1124 has forced debtors
to solicit votes from a class of unsecured creditors that receives a
100% recovery in cash, without postpetition interest. Consequently, as a
technical matter, debtors must now solicit votes from a class of
administrative convenience claims. |
To clarify the procedure for administrative
convenience claims, § 1122(b) should be amended to provide that
debtors need not solicit votes from a class of convenience claims that
receives 100% recovery. In amending § 1122(b), a technical
amendment would also have to be made to § 1129(a)(8) to make these
sections consistent. The author provides sample redrafted versions of
§§ 1122(b) and 1129(a)(8). |
| NBRC-0223 |
Frank R. Kennedy |
Professor, Michigan Law School; former Executive
Director, Commission on the Bankruptcy Laws of the United States
(1973) |
Cover letter discussing various areas of
concern |
|
|
Author provides a list of 30 "Topics for
Consideration by Commission on Bankruptcy Laws." Recommnded topics
relating to Operation of Chapter 11 are: 1. Restoration of stripdown
authority of bankruptcy court 2. Authorization for adjustment of
residential mortgages in Chapter 11 and 13 cases 3. Elimination of
special provisions for financiers of transportation equipment 4.
Treatment of rents as cash collateral 5. Reexamination of special
provisions for landlords 6. Avoidance sections 7. Overruling of
BFP-Durrett 8. Revision of provisions governing debtors-in-possession
and examiners 9. Facilitation of pre-packaged plans of reorganization
10. In forma pauperis petitions 11. Debtor counsel |
|
| NBRC-0245 |
David G. Epstein |
Attorney |
|
|
|
NBRC deliberations should be based on guiding
principles which will control the answers to more specific
questions. |
Author suggests four basic concepts to guide
deliberations on debtor's leases and contracts: (1) author provides
specific suggestions relating to rejections, assumptions, assignments,
modifications and "ride throughs"; (2) creditors should be given notice
of decisions pertaining to contracts and leases, and creditors opposing
th debtor's decision should have an opportunity for a hearing and court
review of that decision; (3) bankruptcy law should clearly indicate the
deadline for a breach/commit to perform/transfer decision, and should
define the rights and obligations of both the debtor and the other party
to the contract or lease until that decision is made; and (4) these
general concepts should not apply to contracts in which the only
performance remaining as of the time of the bankruptcy case is the
payment of funds to or by the debtor. |
| NBRC-0295 |
Robin E. Phelan |
Attorney; forwarding a proposed amendment from Mike
Sutherland of Vinson & Elkins |
Proposed amendment to § 1123(a)(6) |
1123(a)(6) |
|
Author forwards a proposed amendment from another
attorney relating to nonvoting equity securities. The author states that
there are circumstances where nonvoting equity securities are useful in
connection with the plan of reorganization, and both authors agree that
the absolute prohibition of § 1123(a)(6) should be reviewed by the
NBRC. |
Author recommends that the prohibition against
nonvoting equity securities be revoked entirely. The author of the
attached proposed amendment suggests that this section merely be
revised. Suggested statutory language is provided. |
| NBRC-0301 |
National Bankruptcy Conference |
National Bankruptcy Conference (NBC), Bernard Shapiro
- Chair |
|
105 |
|
National Bankruptcy Conference 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 |
|
|
|
National Bankruptcy Conference 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-0303 |
Commercial Law League of America |
Commercial 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-0307 |
Leon S. Forman |
On 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-0318 |
Paul Mignini, Jr., Mary E. Wysocki and Charles M.
Tatelbaum |
President-National Association of Credit Management
("NACM"), Chair-NACM Government Affairs Committee, and NACM Legislative
and Bankruptcy Counsel, respectively |
|
523 |
|
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
§ 523 should be amended to provide that: if an individual, as an
officer or director of a corporation has taken action by or on behalf of
the corporation which would have made the debt non-discahrgeable for the
corporation if it were an individual, then the debt shall also be
non-discahrgeable to that individual as to any guarantor of the
corporate debt who so participated in or effeted the fraudulent
activity. |
| NBRC-0345 |
Philip J. Brandl |
President, National Housewares Manufacturers
Association ("NHMA") |
|
|
|
NHMA members believe that the losses resulting from
the failure of retail enterprises should not fall disproportionately on
suppliers--all constituencies should be represented adequately in the
process of reorganizing or liquidating troubled enterprises. Often,
debtors "load up" on goods just prior to commencing a bankruptcy case in
order to increase their asset bases. This problem is exacerbated by the
generally accepted view that a lender with a floating lien on invetory
receives priority over a supplier's reclamation rights. |
Bankruptcy Code should be amended to prevent
retailers from abusing the system at the suppliers' expense by: (1)
expanding the "look back" period to a least 60 days before commencement
of a case; (2) extending the reclamation period for invetory obtained on
credit; (3) recognizing a supplier's right to proceeds of the sale of
goods subject to reclamation; and (4) recognizing a priority for
suppliers of goods over the claims of a secured lender with an interest
in a debtor's inventory. |
| NBRC-0345 |
Philip J. Brandl |
President, National Housewares Manufacturers
Association ("NHMA") |
|
|
|
NHMA members are concerned about their ability to be
heard in bankruptcy cases. Often creditors' committees do not represent
the interests of smaller manufacturers. Also, it is often not
economically feasible for NHMA members to actively participate in the
case. |
NHMA urges the NBRC to give meaningful attention to
means of increasing the representation of smaller manufacturers in
retail bankruptcies, and that consideration be given to allowing
suppliers to be more informed or in control of their involvement in a
bankruptcy case. |
| NBRC-0368 |
Kenneth N. Klee |
Robert Braucher Visiting Professor from Practice,
Harvard Law School |
Coer letter from Sam Gerdano, Executive Director,
American Bankruptcy Institute, enclosing this submission |
|
|
The author observes that in the debate over the
success of chapter 11, neither side has defined the concept of success.
To sharpen the pending debate, he has written this 98-page paper
addressing the concept of success in business bankruptcies. He concludes
that success must be defined by the optimization of social enterprise
value rather than the direct, quantifiable, economic value for monied
interests. We must also consider the interests of employees,
communities, and others who do not have a direct right to payment
against the debtor. |
Bankruptcy Code would be more successful if it
excluded the cases where the cost to society is likely to be far greater
than the benefit from allowing these cases to proceed, such as those
cases where the stakes are small. The author also recommends that the
Code be amended: (1) to deter fraud by requiring private trustees to
investigate a certain number of cases per year, and (2) to create a
threshold requirement allowing businesses to file under chapter 11 only
if they are good candiadtes to bear the cost of the chapter 11 process
and emerge rehabilitated. |
| NBRC-0384 |
American Bankruptcy Institute |
American Bankruptcy Institute ("ABI") |
|
|
|
ABI presents this "Report on the State of the
American Bankruptcy System," which is the capstone of ABI's three-year
Bankruptcy Reform Study Project. The Project's efforts culminated with a
65-question survey covering a broad spectrum of possible areas of
reform. The study indicates that: (1) in general, the Code of 1978 is
working well; and (2) probelms of delay, excessive costs, unfairness,
and abuse need to be addressed in the current round of
reforms. |
ABI recommnds: (1) strict deadlines for dismissal or
appointment of trustees to help combat abuse; (2) reorganization of
chapter 11 policy to provide stricter time limits, elimination of
non-viable debtors, and reduction of excessive professional fees; (3)
relaxing eligibility requirements for consumer reorganizations under
chapter 13, and providing time limits, limited discharge and uniform
national exemptions; (4) high standards of integrity for all
professionals; (5) a balance between creditors' and debtors' rights, and
equality of distribution; and (6) not adopting priority classes of
claimants. |
| NBRC-0428 |
Judge Robert Martin |
Bankruptcy Judge, W.D. Wis. |
Proposed Draft Statute |
1104 |
|
There is a general distrust for the debtor in
possession model that was made central to the 1978 Code. While the
drafters believed that §1104 would provide an adequate check on the
activites of the DIP, this has not proved to be the case. The current
burden on the party moving for a trustee is almost impossible to meet.
Tha lack of a viable threat that the DIP may lose control of the
reorganiztion process has continued what was known under old Chapter XI
as "the arrogance of the Chapter XI debtor." Unresponsiveness, delay,
looting of the estate, and uneconomic decisions are all potential
products of inappropriate DIP control. |
Author proposes to re-draw the basis for appointment
of a trustee, dramatically shifting the burden to the debtor to
demonstrate (if such a motion is made) that a trustee ought not to be
appointed. Author has attached a Proposed Draft Statute. |
| NBRC-0428 |
Judge Robert Martin |
Bankruptcy Judge, W.D. Wis. |
Proposed Draft Statute |
|
|
The time required to confirm a plan once it is
proposed. The Code adopted a model of informed voting based on full
disclosure. In fact, the question "What constitutes adequate disclosure"
has become a collateral source of litigation which is burdensome and
results in great delay. |
There would be little loss to the integrity of the
system if disclosure statements were done away with altogether. If the
debtor filed a simple summary of the plan, its treatment of different
classes of creditors, and generally, how it will be implemented, any
further inquiry could be safely left to interested creditors and
accomplished under Rule 2004 if informal inquiry is not
sufficient. |
| NBRC-0492 |
Philip J. Brandl |
President, National Housewares Manufacturers
Association |
Position Statement on Bankruptcy Law Reform,
Housewares Manufacturers Coalition |
|
|
NHMA is "concerned about the structure of the
bankruptcy process under which the same managers that presided over the
decline of a retail enterprise often lead it, apparently largely
unsupervised, through the bankruptcy." |
"Representation on a creditors' committee would help;
greater oversight by a truly independent third party, whether the judge
or some type of trustee, would increase the credibility of the
system." |
| NBRC-0492 |
Philip J. Brandl |
President, National Housewares Manufacturers
Association |
Position Statement on Bankruptcy Law Reform,
Housewares Manufacturers Coalition |
|
|
NHMA members are "troubled by the ease with which
enterprises can commence bankruptcy cases." "In our experience...a
significant number of the retail businesses that seek the protection of
bankruptcy law, and that ultimately pay suppliers considerably less than
they are owed, might have worked out their problems without the
expensive and, at times, inequitable intervention of the bankruptcy
process." |
"We commend to the Commission's attention the new
German bankruptcy law model, in which a potential debtor will have to
meet defined financial tests in order to be admitted to bankruptcy
protection. Alternatively, we urge the Commission to consider
recommending an explicit good faith requirement for debtors commencing
bankruptcy cases." |
| NBRC-0552 |
Martin J. Bienenstock |
Weil, Gotshal & Manges LLP |
Proposed Amendment to § 541 of the Bankruptcy
Code, Memorandum of 3/21/97 to Elizabeth Warren from Leon S. Forman,
Letter of 3/5/97 from Elizabeth Warren to Martin J.
Bienenstock. |
541(b) |
362(b) |
"When a company desires to raise money through the
creation of debt collateralized by its accounts receivable, the company
will frequently transfer its receivables to a 'bankruptcy remote
entity.' In turn, the bankruptcy remote entity will issue debt sometimes
guaranteed by credit enhancers...Under current law, the uncertainty
arises when the transfer by the operating company to the bankruptcy
remote entity is deemed to be something other than a sale." |
"To deal with the situation in which the operating
company commences a chapter 11 case, the proposed amendment prevents the
assets transferred to the bankruptcy remote entity from being part of
the operating company's estate." |
| NBRC-0609 |
Michael H. Reed |
Attorney, Pepper, Hamilton & Scheetz
LLP |
Copy of article, M.D. Pa. Expands Successor
Liability; copy of Gould v. A&M Battery. |
363 |
105(a) |
There is uncertainty in the case law over whether
successor liability for existing claims can be cut off by a sale outside
of a plan or, if so, whether the power to cut off such liability is
found in section 363 or is rooted instead in section 105(a). |
Section 363 of the Code should be revised to make it
clear that a good faith purchaser for value of assets in a sale free and
clear conducted pursuant to section 363 of the Code will be free of
successor liability for existing (pre-conveyance) debts of the debtor or
trustee as long as adequate notice of the sale free and clear was given
to every putative successor liability claimant whose identity and
whereabouts was known or reasonably ascertainable. |
| NBRC-0634 |
John H. Neiman |
Attorney |
|
350(b) |
1144 |
Author feels that there should be some type of
supervision after a plan has been confirmed. Under local rules, final
decrees are entered, and for all intents and purposes the case is closed
before the payments required under the plan have been
completed. |
Author suggests an amendment to §1144 which he
feels "would require the debtor or the entity which became the operating
entity to file reports with the Court and the United States Trustee
during the time the Plan is being consummated and the United States
Trustee would be able to file a request for revocation of the Order of
Confirmation if the Plan is not being consummated in accordance with the
confirmation." |
| NBRC-0774 |
Mark C. Trentacoste |
Attorney |
|
|
|
"My own belief, and the impression of others I have
talked to, is that especially for smaller cash businesses, Chapter 11 is
easily abused." A DIP can continue running the business, delaying or
failing to comply with the Chapter 11 plan, liquidating the value of the
business while still drawing an excessive salary or skimming receipts,
and finally, when only a shell of the business is left, converting to
Chapter 7 or being dismissed. |
"I would hope the Code could contain a provision
allowing perhaps a "supermajority" of the creditors to "pull the plug"
and have a trustee appointed who could decide either to continue the
business with new management or to liquidate." |
| NBRC-0824 |
Burton R. Lifland |
Bankruptcy Judge, Southern District of New
York |
Memorandum Decision and Order Denying Motion to
Appoint Examiner Pursuant to 11 U.S.C. §§ 105(a) and
1104(c). |
1104(c)(2) |
|
Author is forwarding an opinion he wrote in a
bankruptcy case in which there was a request pursuant to 11 U.S.C.
§ 1104(c)(2) for the mandatory appointment of an
examiner. |
"I would suggest that, in its deliberations, the
Committee ought to review a patential modification of 11 U.S.C. §
1104(c)(2) as well as the negative and positive aspects of post-petition
claims trading. |
| NBRC-0825 |
Ronald J. Sutter |
Accountant, Financial Consultant |
|
1104 |
|
Author expresses his concern about the priority
status of "Examiners" and to a limited extent Chapter 11 Trustees
appointed under 11 U.S.C. Sec. 1104. When an examiner is appointed, not
a whole lot is then known that is not disputed facts, which is why an
examiner's report is needed. Often, the examiner recommends the
conversion of the case to Chapter 7. This places the examiners in a
conflict of interest because if they recommend conversion to Chapter 7
their own fees and reimbursable costs are subordinated to all the
Chapter 7 administrative expenses, which means that in reality they will
get no or very little compensation. |
"I recommend to you and the National Bankruptcy
Review Commission that the fair and equitable solution to this unfair
conflict be that the payment priority status of an Examiner be raised to
equal that of a Chapter 7 professional." |
| NBRC-0858 |
Ed Goldwasser, et al. |
Small World Toys |
|
|
|
"Debtors should be curtailed from filing Chapter 11
preemptively against their creditors." |
N/A |
| NBRC-0900 |
James J. White |
Professor of Law, University of Michigan Law
School |
Copy of author's testimony before the Bankruptcy
Commission on May 14, 1997. |
|
|
Author writes to send a copy of his comments to the
Commission on May 14, 1997 and to address the issue of the effect which
his suggestion that the Chapter 11 be speeded up would have on the
distribution of assets. |
None. |
