Senate Finance, HELP Panels Strike Deal on Pension Bill
Two key Senate committees resolved their differences on pension legislation today, possibly setting the stage for the bill to come to the Senate floor by the end of next week, CongressDaily reported today. Senators reached agreement after Senate Finance Chairman Charles Grassley (R-Iowa) and ranking member Sen. Max Baucus (D-Mont.) met today with Health, Education, Labor and Pensions Chairman Michael Enzi (R-Wyo.) and ranking member Sen. Edward Kennedy (D-Mass.). On the outstanding area of dispute regarding how quickly financially troubled companies will be required to fully fund their pension plans, Grassley said that the committees "split the difference," but he did not reveal details. Finance leaders agreed to accept the HELP provision on multiemployer plans, while cash-balance provisions will be closer to the Finance Committee version, Grassley said.
Meanwhile, House Education and the Workforce Chairman John Boehner (R-Ohio) said that he expects to have the pension package on the House floor by the end of October.
Boehner sharply criticized a provision in Senate pension legislation that would allow airlines more time to stretch out payments to their pension plans, calling it "irresponsible" and "not good policy." The provision, which was included in both the Senate Finance and Senate Health, Education, Labor and Pensions committees' versions of legislation, would allow airlines to amortize over 14 years payments needed to fully fund their plans, and allow them to use historical interest rates in calculating liabilities. However, Boehner said that he was open to discussing alternative approaches to target relief to the airlines.
Boehner stressed that hurricane response efforts have injected a tremendous amount of uncertainty into Congress' schedule for the remainder of the year, including the question of whether it will complete the FY06 budget reconciliation process. Boehner and other House leaders have discussed moving a provision raising premiums companies pay to participate in pension plans through reconciliation, while moving the rest of the pension package as stand-alone legislation.
STORM VICTIMS MAY FACE CURBS ON BANKRUPTCY
When Congress agreed this spring to tighten the bankruptcy laws and crack down on consumers who took on debt irresponsibly, no one had the victims of Hurricane Katrina in mind. But four weeks after New Orleans flooded and tens of thousands of other residents of the Gulf Coast also lost their homes and livelihoods, a stricter new personal bankruptcy law scheduled to take effect on Oct. 17 is likely to deliver another blow to those dislocated by the storm.
Right after Hurricane Katrina struck, several lawmakers—mostly Democrats, but including some Senate Republicans—suggested that storm victims along the Gulf Coast should get relief from the new law's stricter provisions, which are intended to screen filers by income and make those with higher incomes repay their debts over several years. Under the old law, which remains in effect until mid-October, many more filers can have their debts canceled quickly in federal bankruptcy courts.
But House Republicans, who fought off a proposed amendment that would have made bankruptcy filings easier for victims of natural disasters, said there was no reason to carve out a broad exemption just because of the storm. Read the full story.
GREENSPAN: MORTGAGES COVER CREDIT CARD DEBT
With new evidence that the housing market remained red hot last month, Fed Chairman Alan Greenspan told American Bankers Association Annual Convention attendees yesterday that the vast majority of homeowners are not yet stretched too thin. But Greenspan warned that the use of "exotic" mortgages could be pushing prices higher and inducing some homebuyers to take on too much risk. Even as he warned about the increasing use of interest-only loans and no-money-down loans, which can become risky if interest rates rise or housing prices fall, Greenspan argued that only about five percent of all families have borrowed more than 90 percent of the value of their houses.
"The vast majority of homeowners have a sizable equity cushion with which to absorb a potential decline in house prices," he said. He also noted that speculation in the housing market may have spilled over into the mortgage markets as more and more people use interest-only loans and other techniques to buy homes they might otherwise be unable to afford. Read the full story.
ABA RELEASES REPORT ON ATTORNEY LIABILITY UNDER
The American Bar Association’s (ABA) Ad Hoc Committee on Bankruptcy Court Structure and the Insolvency Processes recently established a task force to draft a proposed model local rule for the bankruptcy courts regarding attorney discipline. Two primary issues fueled the task force: 1) a perception that the bar and the bankruptcy courts have not adequately addressed attorney misconduct in bankruptcy cases; this perception has led to fairly broad support for the attorney liability provisions of BAPCPA, and 2) the issue of BAPCPA provisions establishing attorney liability.
In a Sept. 20 final report of the committee, the ABA concluded that those provisions are likely to result in an increase in attorney disciplinary proceedings in the bankruptcy courts. The committee also concluded that the state bars are not well-suited to discipline bankruptcy attorneys who violate the Rules of Professional Conduct, because the violations often involve a bankruptcy law issue outside the expertise of the state bars and because of the lengthy period before the state bar process might never result in disciplinary action. Read the full report.
RESIDENT SCHOLAR MARTIN APPEARS LIVE ON LAW JOURNAL
ABI’s Resident Scholar, Prof. Nathalie Martin, appeared on the weekly, award-winning cable TV program Law Journal yesterday. The episode, “Windows Closing! The New Bankruptcy Laws Are Now!” went to more than 2.7 million homes in Philadelphia, the Greater Lehigh Valley in Pennsylvania, western New Jersey and Delaware. View a Webcast of the program here.
REGISTER TODAY FOR VIEWS FROM THE BENCH 2005
Join ABI and the Georgetown University Law Center CLE for Bankruptcy 2005: Views from the Bench, and earn up to 6.0 CLE/7.0 CPE credits, including 1.0 hour of ethics.
The program, which will be presented on Oct. 7, features the views of 18 U.S. bankruptcy judges from across the country. Timely topics—all updated with the latest legislative revisions—include:
- First-day Issues: Changes in Procedures under the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA).
- Section 363: New Developments Including Precision Industries Inc. v. Qualitech—Sales Free and Clear of Leases and Other Valuable Rights
- Mass Tort Problems: Including Prepacks, Legislation, Future Claims and Combustion Engineering.
- Separate Topical Break-out Lunches with the Judges: A unique opportunity for attendees to follow up on the morning’s topics in small groups with the judges and speakers.
- Pension and Employee Issues: Reconciling the Interests of Unions/Employees, the PBGC and the Estate: §1113 and Terminating Underfunded Pension Plans.
- Legal Ethics: Examination of Issues Involving Representation of the Creditors’ Committee, Conflicts and Solicitation for Appointment.
- BAPCPA: How Will the Act Affect Business Bankruptcies, including Reclamation, Preferences, Exclusivity, Property of the Estate, Plan Modification and Discharge of Debtors under Chapter 11?
To learn more, click here. More than 200 already registered.
REGISTER NOW FOR ROCKY MOUNTAIN BANKRUPTCY CONFERENCE AND SAVE $50!
Please join us for the Eleventh Annual Rocky Mountain Bankruptcy Conference, to be held January 26–28 in beautiful downtown Denver, Colo.
The educational program will provide attendees with an interactive learning experience led by a faculty of highly regarded bankruptcy judges and experienced practitioners. The roundtable format emphasizes discussion of relevant insolvency issues among the faculty and the participants.
This conference is an educational opportunity not to be missed! Up to 12 hours of CLE credit, including three hours of ethics, can be earned.
BEST OF NORTHEAST BANKRUPTCY CONFERENCE 2005 IS TOMORROW!
Don’t miss the Best of ABI: The Northeast Bankruptcy Conference tomorrow at 11:00 a.m. EDT!
"Legal Fees and Ethical Issues"
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 highly-rated panel of speakers:
Charles F. Dougherty, partner at Foley & Lardner LLP in Boston
John G. Loughnane, partner at Gadsby Hannah LLP in Boston
Hon. Joel B. Rosenthal, U.S. Bankruptcy Judge for the District of Massachusetts in Worcester
Paul R. Salvage, partner at Bacon & Wilson PC in Springfield, Mass.
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.
PREPARE FOR THE CERTIFICATION EXAM
The new bankruptcy law provides that courts will take into account board certification when awarding attorney fees under §330. The American Board of Certification is offering its exams several times this fall (covering current law). You can prepare for the exams with a handy and affordable CD-ROM prepared by board-certified ABI members. The CD includes materials on consumer bankruptcy, business bankruptcy, ethics and creditors’ rights. Sample exam questions and answers are also included. Member price is $195. Buy Now!
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