Bush Signs New Bankruptcy Law; Meaning of Democratic Support Debated
In a signing ceremony yesterday of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (S. 256), President Bush stressed personal responsibility, saying "America is a nation of personal responsibility where people are expected to meet their obligations," adding, that the law "will protect those who legitimately need help, stop those who try to commit fraud and bring greater stability and fairness to our financial system." View the full signing ceremony.
With certain exceptions, the new law is generally effective in 180 days , applicable only to cases filed on or after the effective date (Oct. 17, 2005). To view the Judiciary Committee Report on S. 256, including the legislative history of the new law, go to ABI’s special section on the bankruptcy bill. Included is the official red-line text of changes made to current law.
A story in today’s Washington Times reported on the trend of House Democrats voting with Republicans on several major bills this year, including the bankruptcy bill. “The pattern is beginning to show that many rank-and-file Democrats are looking to the Republican agenda,” said Rep. Eric Cantor (R-Va.).
House Minority Whip Steny Hoyer (D–Md.), the number two Democrat, was one of 73 Democrats who broke with Minority Leader Nancy Pelosi (D–Calif.) on the bankruptcy bill, but rejected that theory. “When the leader and I decide we want to see a unified Democratic message, we send it,” Hoyer said.
Moveon.org is running radio ads attacking Hoyer’s support of the bankruptcy bill.
Specter Still Open to Asbestos Changes
Supporters of asbestos legislation yesterday vowed to hold firm against major changes to the bill in committee, although the bill's chief sponsor allowed there could be some modifications, CongressDaily reported. Senate Judiciary Chairman Arlen Specter (R-Pa.) said he could envision modifying in committee provisions in the bill banning asbestos altogether, saying there might be "defense uses" or other special circumstances that might warrant the use of asbestos. Likewise, he said another amendment that might be debated would call for the re-evaluation of medical criteria outlined in the bill if the proposed asbestos trust fund was running out of money in 20 years. Read the Washington Post’s editorial on asbestos.
U.S. Pension Insurer Eyes Pension Obligation Bonds
The federal agency that rescues failed U.S. corporate pensions is considering issuing pension obligation bonds, its executive director said yesterday, Reuters reported. "I think it's incumbent on us to look at satisfying market place needs as well as meeting our own financing requirements," said Bradley Belt, head of the Pension Benefit Guaranty Corp. The pension agency is looking at pension bonds, as well as a range of other ideas, although nothing concrete is in the works, Belt said. Pension obligation bonds could satisfy investor demand for long-duration securities, which are in short supply in the market, he said.
Make Plans To Attend ABIís 10th Annual Southeast Bankruptcy Workshop
Register to attend ABI’s 10th Annual Southeast Bankruptcy Workshop, to be held July 27-30, at the Kiawah Island Resort in South Carolina. The program of 16.5 CLE credit hours (including 1.5 hours of ethics) features a faculty of outstanding scholars, judges and practitioners from across the United States. Timely topics include an overview of the new bankruptcy legislation, mediation and ADR, assignments for the benefit of creditors, receiverships and other alternatives to bankruptcy, interest rates and other confirmation issues after Till, “deepening insolvency” issues, ethics, developments in banking and commercial law, current caselaw on consumer issues, insurance issues and other topics. Optional events include golf and tennis tournaments, a tour of historic Charleston, horseback riding, sailing and much more. Register before June 17 and save $50 off the regular registration rates.
New Law Recognizes Value of Board Certification
The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (S. 256) adds an important new tool that will help bankruptcy courts ensure that attorneys paid by bankruptcy estates have the skill and expertise required for modern bankruptcy practice. The law now expressly authorizes bankruptcy judges to base their fee awards on whether the lawyer has met the high objective standards needed to become board certified by the American Board of Certification (ABC). Specifically, the new legislation amends the Bankruptcy Code's compensation guidelines to add a new compensation factor. New Section 330(a)(3)(E) directs the judges to consider "whether the person is board certified or otherwise has demonstrated skill and expertise in the bankruptcy field."
According to ABC President William L. Norton III of the Nashville, Tenn. firm, Boult, Cummings, Conners & Berry, “This new provision recognizes that Board certification provides a simple, meaningful and objective measure of skill and expertise in the bankruptcy field.” ABC certification makes it possible to easily identify those professionals who have the special skills and experience necessary to handle bankruptcy cases in the most efficient manner. In response to the amendment, ABC Board Member Prof. G. Ray Warner of St. John’s University School of Law and of counsel at Greenberg Traurig said, “Legislators and the courts recognize that the successful operation of the bankruptcy system depends upon the involvement of professionals with special expertise.”
For more information, visit www.abcworld.org.
Young & New Members and Financial Advisors Committees to Address Prearranged Plans at ASM
Join the Young and New Members and Financial Advisors Committees for a joint program at ABI’s Annual Spring Meeting, to discuss the varying constituencies and dynamics when negotiating a prearranged plan of reorganization. Hear a panel discussion from the viewpoints of the company, investment bankers, buyers of distressed debt, senior lenders and lawyers that focuses on the process of negotiating and implementing a prearranged plan, the role of various players and advisors in the process, key factors for success, and recent case examples.
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