American Bankruptcy Institute Update

October 20, 2005

In This Issue

Highlights

Legislation Update

Dems Request BAPCPA Study

Congressman John Conyers (D-Mich.), in cooperation with 13 other Democratic members of the House and the Senate, sent a request Tuesday to the General Accounting Office (GAO) to study the impact of the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) on the following areas:

· Victims of Natural Disasters
· Single Parents and Children
· Low- and Middle-Income Debtors
· Military Families
· Credit Counseling
· Business Bankruptcies and Employees
· New Costs to the Bankruptcy System
· Homestead Exemption and Asset Trust Loopholes
· Credit Industry Practices
· Tax Provisions

The study will run from Oct. 17, 2005 until Oct. 17, 2006. Interim status reports have been requested for congressional review. GAO is the investigative arm of Congress.

The co-signers of the letter were Sens. Russ Feingold (D-Wis.), Patrick Leahy (D-Vt.), Richard Durbin (D-Ill.) and Edward Kennedy (D-Mass.); and Reps. Melvin Watt (D-N.C.), Jerrold Nadler (D-N.Y.), Zoe Lofgren (D-Calif.), Bobby Scott (D-Va.), Chris Van Hollen (D-Md.), Howard Berman (D-Calif.), Debbie Wasserman Schultz (D-Fla.), William Delahunt (D-Mass.) and Sheila Jackson Lee (D-Tex.). Read the letter, which contains report specifics.

Northwest Airlines Pension Relief Stalled in Congressional Impasse

When Northwest Airlines filed for bankruptcy, it gave much control over the company's future to a bankruptcy judge in New York. But the fate of one key element of Northwest's plan to return to profitability lies with a much more complex authority: the U.S. Congress. Seven months after Northwest first called for more time to pay off its pension debts, a bill that would ease the pension burden is stalled near the finish line.

Northwest says that under current law, it owes about $3.3 billion to its employee pension plans over the next three years , as reported by Minnesota Public Radio yesterday. CEO Doug Steenland told the U.S. Senate Finance Committee in June that unless the company gets more time to pay off the debt, it could be forced to dump its pensions on the government-run pension insurance program, the Pension Benefit Guaranty Corp. (PBGC).

If Northwest terminates the plans and leaves them with the PBGC, payments for some workers would shrink substantially. The pilots union, in particular, has backed changes in pension law that might keep Northwest from dumping its plans.

Northwest and Delta sought 25 years to pay off their pension debts. Republican and Democratic committee leaders in the Senate ultimately agreed on 14 years, and extended the opportunity to other airlines. Read the full story.

COMMENTARY - BANKRUPTCY LAW NOT ALL THAT'S NEEDED

The most sweeping changes in U.S. bankruptcy law went into effect Monday. Filing bankruptcy is now harder than it used to be, but it's not impossible. The new laws have strong provisions to help prevent abuse of the system, but there's only so much that legislation can do, according to an opinion piece in the Springfield ( Mo.) News Leader.

No law can stop people from making bad financial decisions. What is needed to stop out-of-control bankruptcies from sending our nation into financial ruin is a culture shift. One of the best pieces of the new bankruptcy legislation is that it requires people to get credit counseling before they can file. Additionally, people have to take a course on managing their finances before they can exit bankruptcy. As good as these classes are, for too many people they will be too little too late.

Bankruptcy is far too often a symptom of a larger problem. Sometimes that problem could be that an unexpected illness brought on medical bills an individual could not handle. It could be divorce or an unexpected unemployment. However, far too often the cause of bankruptcy is a person's inability to distinguish between wants and needs. Read the entire commentary.

DETROIT BANKRUPTCY CONFERENCE PROVIDES INTENSIVE NEW-LAW EDUCATION

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. More than 300 have already registered. The event will be held Nov. 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 at and earn up to 7 hours of CLE credit.

REGISTER NOW FOR ROCKY MOUNTAIN BANKRUPTCY CONFERENCE AND SAVE!

Please join us for the Eleventh Annual Rocky Mountain Bankruptcy Conference, to be held January 26–28 in beautiful downtown Denver, Colorado.

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.

Up to 12 hours of CLE credit, including three hours of ethics, can be earned. Optional events include a ski trip to Keystone and a Nuggets NBA game.

Register today and save!

ABIíS SECOND CARIBBEAN INSOLVENCY SYMPOSIUM COMING IN FEBRUARY

Join ABI in Miami for the Second Caribbean Insolvency Symposium, February 9-10, 2006, at the Eden Roc Resort & Spa in Miami.

This year’s program brings together top international speakers to discuss the issues of the moment in international insolvency and restructuring. The Eden Roc, located right in the heart of Miami Beach, provides a memorable venue for the conference.

The program of 7.25 CLE credit hours features a faculty of outstanding scholars, judges and practitioners from across the United States, the Caribbean and South America. Timely topics include:

  • CAFTA and new Chapter 15: Forum-shopping in the Caribbean
  • Introduction to the New Bankruptcy and Restructuring Law in Brazil 
  • Small Business and Individual Chapter 11 under BAPCPA 
  • Tough Ethical Dilemmas after BAPCPA 
  • Dealing with Disasters: The New Bankruptcy Law after a Natural Disaster
  • Views from the Bench

Be among the first to register for this important program in a tropical location.

2005-06 ABI MEMBERSHIP DIRECTORY PRINT EDITION AVAILABLE FOR SALE

The print edition of the 2005-06 ABI Annual Membership Directory is now available. This 21st edition lists more than 11,000 insolvency professionals, more than ever before, and is a symbol of ABI’s sustained membership growth. The Directory is one of the many benefits of ABI membership and is available exclusively to members. An online version of the Directory is available at the ABI World Web site (www.abiworld.org), which is continually updated. All members will receive a complimentary CD-ROM version of the Directory with their November ABI Journal.

This expanded print edition enables you to capitalize on the depth and diversity of our membership. In addition to indexing each member by geographic area, ABI committee, profession and practice area, there are references to firm size and certification to assist you in identifying colleagues for referrals. Included is a “Multiple Members by Firm” section, which permits you to easily locate all members from a particular law, accounting or turnaround firm. Members are also listed under other locations where they have offices, thus enhancing your ability to easily find bankruptcy professionals nationwide. Also included are e-mail addresses and firm Web site listings. The Endowment section includes guidelines for consideration of Endowment Fund grant proposals. The $55 cost of the printed version includes shipping and handling, Visit the ABI bookstore to order .

ABI WORLD TUTORIAL HIGHLIGHTS DAILY NEWS AND BANKRUPTCY COURT UPDATES

Do You Know?

A new online tutorial shows you how to find daily news stories, information and bankruptcy opinions on ABI’s comprehensive Web site. The tutorial features a visual demonstration of how to locate these documents quickly and easily, and guides you through the navigation process. This is the fourth in a series of tutorials that will highlight the many resources and services available at ABI World.

New Opinions Posted Online

In re: Center for Advanced Manufacturing and Technology — October 2005

In re: Jimmy Lynn Thomas — July 2005

New Circuit Case Updates Posted Online

2nd Circuit Update Sep-30-2005

11th Circuit Update Oct-4-2005

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: