American Bankruptcy Institute Update

May 31, 2005

In This Issue

Highlights

Legislation Update

Opponents Criticize the Asbestos Bill

Several consumer, environmental and victims’ groups criticized the asbestos bill approved by the Senate Judiciary Committee last week, saying the bill would not adequately compensate all asbestos victims, CongressDaily reported. Mike Harbut, the co-director of the National Center for Vermiculite and Asbestos-Related Cancers, said the medical criteria included in the bill to determine eligibility would exclude some individuals with asbestos-caused illnesses. People exposed to asbestos near facilities where asbestos was shipped from Libby, Mont., would be denied payment under the fund, according to Richard Wiles, senior vice president of the Environmental Working Group. “We’re going to keep this issue in the forefront,” he said. “These people are literally denied any access to any assistance.” The bill passed the committee with the support of all Republicans and three Democrats. It has not yet been scheduled for a floor vote, and several Republicans intend to offer amendments before it passes the Senate.

Filing Fee Increase and Effective Date Amendment for §325 of the New Bankruptcy Law

Section 325 of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 has been amended by H.R. 1268, the Emergency Supplemental Appropriations Act for Defense, the Global War on Terror, and Tsunami Relief, 2005 (Pub. L No. 109-13), which the President signed into law on May 11, 2005.

The filing fee for chapter 7 cases is also increased under the Appropriations Act amendment to $220 from the $200 fee provided for in S. 256. The fee increases for chapter 11 and chapter 13 cases provided for in S. 256 are unchanged by the Appropriations Act.

Consumer Confidence Rises in May

U.S. consumer confidence surprisingly rebounded in May after three straight monthly declines, the Conference Board said today. The consumer confidence index rose to 102.2 in May from 97.5 in April. Economists expected the index to fall to 95.9 from the earlier estimate of 97.7. “Consumer confidence improved in May, gaining back nearly all of the ground it lost in April,” says Lynn Franco, Director of The Conference Board’s Consumer Research Center. “The Present Situation Index, despite fluctuations in recent months, is more than 26 points higher than a year ago. Consumers’ concerns about the economy and jobs have eased. The Expectations Index, while slightly below year-ago levels, continues to signal economic growth in the months ahead.”

Arthur Andersen Conviction Overturned

The Supreme Court today overturned the conviction of Arthur Andersen for destroying Enron Corp.–related documents because of flawed jury instructions, Reuters reported.

In a defeat for the U.S. Justice Department, the unanimous high court ruled that the jury instructions failed to convey properly the elements of what constitutes a conviction for corrupt persuasion. Andersen, which had been Enron’s longtime auditor, was convicted on a single count of corruptly persuading its employees to destroy documents in October and early November 2001, to keep them from federal investigators. Andersen’s lawyers had argued that jurors should have been told that they needed to find the company had acted knowingly to subvert an investigation in order to be found guilty. Chief Justice William Rehnquist in the court’s opinion agreed with the company. The justices sent the case back for further proceedings.

Upcoming in the ABI Journal

The June issue of the ABI Journal features articles on §363 sales, preference proceedings under the new law and informal proofs of claim. Other topics include volunteering for chapter 7 pro bono cases, changes in the bankruptcy law affecting small retail debtors, bankruptcy reform implementation now underway at the USTP, pre-emption and the Bankruptcy Code, bankruptcy appeals, fundamentals of intellectual property valuation and more. Watch for the June issue of the ABI Journal coming to your desks next week!

ABI Publications Now Posted Online

The following publications can now be ordered online at ABI’s bookstore.

2004–05 ABI Membership Directory

This year’s ABI membership directory provides information on more than 10,300 members. Exclusive to members only for a limited time!

Mini-codes Special Redlined Edition

In this special redlined edition, amendments made by the Bankruptcy Abuse Prevention and Consumer Protection Act are printed in red and underlined; deletions are made by striking through the text. The book features rules references, practitioner’s index, landmark U.S. Supreme Court bankruptcy cases incorporating the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 and a table of effective dates.

Distressed Investment Banking: To the Abyss and Back

ABI Investment Banking Committee Co-chair Peter Kaufman and Henry Owsley provide an insider’s viewpoint on the methods and complexities of restructuring troubled companies in this fascinating area of investment banking.

ABI Conference Educational Materials on CD-ROM

2005 Conference Educational Materials

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: