American Bankruptcy Institute Update

March 1, 2005

In This Issue

Highlights

Legislation Update

Senate Floor Debate Continues Amid Slight Drop in 2004 Filings

The Senate continued debate this afternoon
on S. 256, with a number of amendments offered. Amendments to exempt members of the armed forces from the means test are pending, as are amendments to the homestead rules. More amendments will be offered regarding medical debts, privacy of financial information, creditor disclosure practices and the so-called Schumer amendment to prevent discharge of certain debts arising from abortion protests.

The Bush Administration has come out in support of the bill as reported by the Judiciary Committee.

At the same time, the Administrative Office of the U.S. Courts announced that total new bankruptcies fell by nearly 4 percent during 2004. In January, ABI predicted that filings would continue to flatten out and decline in the fourth quarter of 2004, based on trends in consumer debt and credit card default rates. The latest results are consistent with the forecast, though filings may spike up in early 2005 due to concern over the effect of the bankruptcy bill.

Business filings dropped slightly (2.1 percent) in 2004. Since 2001, business filings have dropped 14 percent. So far this year, only new 15 public companies have filed for chapter 11, the lowest filing rate of new public company cases since 1997.

Coalition Urges House Speaker to Push Bankruptcy Reform

The Blue Dog Coalition, a group of 35 House Democrats from across the nation, has endorsed of H.R. 685/S. 256, the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, and urged Speaker Dennis Hastert (R-Ill.) to move quickly in bringing this important legislation to the floor, should it pass the Senate.

The Blue Dogs voted overwhelmingly to pass bankruptcy reform during the 108 th Congress, and have endorsed H.R. 685 this year. “We can all agree that it is important to provide protections for consumers in debt and those with legitimate bankruptcy claims; however, the current system is broken,” says the letter. Read the letter at http://abiworld.net/bankbill/index.html.

To view other letters of endorsement of the bankruptcy bill, and to read about the latest developments, visit http://abiworld.net/bankbill/index.html

Asbestos Bill at Critical Stage, Specter Says

A proposal for a $140 billion asbestos compensation fund will be put in the "deep freeze" unless lawmakers soon agree on the details, Senate Judiciary Committee Chairman Arlen Specter (R-Pa.) warned today in an op-ed article in the Washington Times. Specter said the proposal is at a critical stage and would be removed from his committee's agenda in the next few weeks if disagreement continues on the fund's size and other issues. "Now is the breakpoint," he said in the article. "Prompt compromises will have to be forthcoming if this critical legislation is to become law or relegated to the deep freeze." Read the full article.

Register For The New York City Bankruptcy Conference By This Friday And Save

Register to attend the New York City Bankruptcy Conference by this Friday, March 4, and save $100 off the regular registration fee. The conference, to be held May 9 at the Millennium Broadway in New York, will bring together a faculty of bankruptcy judges from the Southern and Eastern Districts of New York and practitioners from the top national insolvency firms. The format is designed to appeal to both experienced and new practitioners. One of this year’s highlights is Prof. Lynn LoPucki, who will respond to critics of his controversial new book, Courting Failure: How Competition for Big Cases is Corrupting the Bankruptcy Courts.

The popular stand-alone primer course, “ Bankruptcy Fundamentals: Nuts and Bolts for New and Young Practitioners,” will be offered again this year on May 6 at the U.S. Bankruptcy Court in Manhattan. At this special program an outstanding faculty of judges, academics and practitioners will explain the fundamentals of bankruptcy. Register online for the New York Bankruptcy Conference or only for the one-day Nuts&Bolts program.

New Book Now Available

The Annual Review of Insolvency Law, 2004 is now available online. The Review covers significant cross-border issues in both chapter 11 and Canada ’s CCAA, including substantive consolidation, inter-company and related claims, DIP financing, labor issue, forward contracts, retiree benefits and more. This hardbound volume is 578 pages.

What’s New at GlobalInsolvency.com

The Prague Post
MPs Kill Bankruptcy Amendment

Latest Job Postings at ABI Career Center

Check out the ABI Career Center. The Center is a one-stop site for job seekers and employers in the insolvency community. Career Center resources are available free to both employers and job seekers. New positions are featured daily. The latest listings include: