American Bankruptcy Institute Update

September 20, 2005

In This Issue


Legislative Report

U.S. Trustees Office Releases Initial List of Approved Credit Counselors

The Executive Office for the U.S. Trustees today released the names of companies approved to serve as credit counselors. Most of those in this initial list provide so-called debt-management plans.

The new bankruptcy law, which takes effect next month, requires bankruptcy filers to undergo credit counseling as a condition of eligibility. Read the full list.

Fed Raises Interest Rate

The Federal Reserve this afternoon boosted to 3.75 percent the federal funds rate -- interest that banks charge each other, CongressDaily reported. It was the 11th straight increase in the rate, and the Fed said that more increases might be coming despite the damage caused by Hurricane Katrina. "While these unfortunate developments have increased uncertainty about near-term economic performance, it is the committee's view that they do not pose a more persistent threat," said members of the Federal Open Market Committee in a statement accompanying the announcement of the rate hike. The decision was not unanimous, however, as Federal Reserve Governor Mark Olson cast a dissenting vote to leave the rate where it was.

Bankruptcy Relief and Natural Disasters

The Congressional Research Service has issued a report, Bankruptcy Relief and Natural Disaster Victims, which considers whether bankruptcy law in general, and the BAPCPA in particular, may present unique challenges to financial recovery for those whose lives, livelihoods and/or homes have been damaged or destroyed. Read the report.

ALEC Releases Report Highly Critical of Asbestos Litigation Reform Legislation

The American Legislative Exchange Council (ALEC) released yesterday studies on The Fairness in Asbestos Injury Resolution (FAIR) Act of 2005, and found the legislation to be fundamentally flawed. The report, prepared by Bates White, a Washington, D.C.-based economic consulting firm, was released yesterday at Mealey's National Asbestos Litigation Conference in Philadelphia.

The Bates White study found that the FAIR Act, which removes asbestos claims from the courts and creates a $140 billion asbestos trust fund to be financed by defendants and insurers, has one prevailing problem that cannot be overcome: it will be bankrupt in just one to three years. The study determined that this financial shortfall will result primarily from many individuals with lung and other cancers, who were not historically compensated with asbestos lawsuits, to now be compensated by the FAIR Act. Additionally, claimants who have settled with most, but not all defendants, could now be able to use the FAIR Act to recoup additional payments.

According to the study, the FAIR Act would create asbestos claims worth between $301 billion and $561 billion for individuals who assert a work history either with, or in the vicinity of, asbestos. Since the funding level of the Trust Fund is $140 billion over 30 years, the result would be a funding shortfall of $161 billion to $421 billion and could leave 383,000 to 913,000 potential future asbestos victims uncompensated. Read the full story.


ABI’s Detroit Bankruptcy Conference, "Practice Under the New Bankruptcy Law" brings together the area’s top insolvency professionals for one day of intense learning. The event will be held November 11, 2005, at the Novi Sheraton. Topics include:

    • U.S. Trustee Implementation: Entering, Getting Through and Exiting the Process
    • The Means Test: An In-depth Analysis
    • Chapter 13 Changes
    • What Debtors Get to Keep (And Not): Homestead Exemption; Household Goods; Privacy Issues
    • The New Super-Creditor: Domestic Support Changes
    • The New World of Chapter 11: Small Business Rules, Strategies in Real Estate Cases, Lease Rules, Preference and Reclamation Issues and Ethics
    • Tax Changes

    Register today and earn up to 7 hours of CLE credit.



This is your last chance to register for tomorrow’s Webinar, “Preclusion Issues: Been There, Done That,” which will be held at 1:00 p.m. Central / 2:00 p.m. EDT.

Click here to register!

And don’t miss the Best of ABI: The Northeast Bankruptcy Conference on September 28 at 11:00 a.m.  EDT! Beyond the simple admonition to get as big a retainer as possible, does it matter from whom the retainer comes and whether the asset used to pay the retainer was pledged? How might you wrestle a retainer from a secured creditor? What’s happening with carve-outs and how much should they be? How to say no to a client and whistle blowing. The obligations and limits of zealous advocacy. Candor with tribunal and possible conflicts with duties of loyalty and confidentiality to client. These issues and more will be addressed by a panel of renowned speakers

For more information or to register, Click Here.

The “Best of ABI” series brings the highest-rated sessions from each ABI conference right to your office. We provide a special Web interface for this program, allowing participants to interact online with presenters through Q&As, file-sharing and dynamic polling. ABI offers the latest distance learning technology in order to provide you with this innovative learning experience. CLE/CPE credit will be available in certain states.

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: