CLLA Technical Issues -Interim Rules

The Commercial Law League of America (CLLA) submitted a position paper to Congress on December 7, 2005 in agreement with letters recently circulated by the National Bankruptcy Conference (“NBC”), the American Federation of Labor and Congress of Industrial Organizations ("AFL-CIO") and the International Union, United Automobile, Aerospace & Agricultural Implement Workers of America (“UAW”) [attached] opposing the pension termination surcharge provision contained in the recently passed S. 1932 Deficit Reduction Omnibus Reconciliation Act of 2005 and in the corresponding provisions now pending in the House in H.R. 4241, entitled Deficit Reduction Act of 2005. While the CLLA acknowledges the legislative attempt to improve the solvency of the Pension Benefit Guaranty Corporation (“PBGC”), the proposed surcharge will have a disastrous impact on debtor-companies attempting to undergo reorganization and thus, also on retirees, employees and creditors.

The CLLA urged Congress to consider the possible consequences of this proposal. Under H.R. 4241, a surcharge of $1,250 per defined benefit plan participant for three years will be assessed on companies that terminate their pension plans during the pendency of bankruptcy. The CLLA concluded by urging members of congress to vote no.

The position paper and letters from the NBC, AFL-CIO and UAW can be downloaded here.

BRIEF OF THE COMMERCIAL LAW LEAGUE OF AMERICA AS AMICUS CURIAE

KOONS BUICK PONTIAC GMC, INC., v. BRADLEY NIGH

Petitioner espouses the decision in Strange v. Monogram Credit Card Bank of Georgia, 129 F.3d 943 (7th Cir. 1997). The Commercial Law League of America asserts that the reasoning of that case is defective and inconsistent with the rules of legislative construction adopted by this Court. Respondent’s position gives effect to each portion of Section 1640(a)(2)(A), whereas Petitioner’s argument renders Section 1640(a)(2)(A)(iii) meaningless.

Section by Section analysis of HR 975: As with past versions of proposed bankruptcy reform legislation, the CLLA has prepared a detailed analysis of each Section of the current bill. This analysis has been praised by a variety of experts in the field as being a concise and invaluable tool to use while reviewing the changes being proposed to how bankruptcy is currently practiced.

Response to Rep Delahunt: The League, responding to additional questions from Rep. Delahunt (D-Ma) after the March 4, 2003 House Judiciary Committee, Subcommittee on Commercial and Administrative Law oversight hearing on the need for bankruptcy reform, provided the following information on the bill and some specifics about how it is detrimental to small businesses.

CLLA Position Paper on the Homestead Calculation: The League is in full agreement with a letter recently circulated by more than 60 professors of law with expertise in bankruptcy and commercial law pointing out the substantive and procedural flaws inherent in the compromise language reached by the Conference Committee on H.R. 333 regarding the homestead exemption.

Position Paper on the Attorney Liability Provisions of H.R. 333

The League has serious concerns regarding the provisions of Section 102 of H.R. 333 that impose liability on attorneys representing consumer debtors in Chapter 7 bankruptcy cases. These provisions, which appear intended to impose liability upon counsel when his client’s income and expenses fail to pass muster under the means test, are fraught with problems ranging from interpretative difficultly to a disruption of the core relationship between attorney and client.

Position Paper on SMALL BUSINESS ISSUES: “Although the League is generally opposed to the small business provisions of both H.R. 333 and S. 220, if they are to be enacted, the debt limit used in the definition of a small business should be $2 million, not $3 million as provided for in Section 432 of each bill if meaningful bankruptcy reform is to be achieved.”

The CLLA is pleased to note that future versions of bankruptcy reform have generally had small business defined as $2 million.

Fair Debt Collection Practices Act – February 19, 2001

The purpose of this comment is to address amendments to the Fair Debt Collection Practices Act (“FDCPA”) the League believes are necessary to eliminate statutory impediments to the legitimate collection of debt that, concurrently, provide no real benefit to consumers. The League understands the importance of the FDCPA to consumer debtors as well as its importance in ensuring a level playing field for those involved in debt collection. However, practical experience has shown that aspects of the FDCPA diminish legitimate access to legal remedies – raising significant Due Process concerns in the process – simply because the party seeking redress is attempting to collect a debt.

Position Paper on Business Bankruptcy Issues submitted to the Hearing of the Subcommittee on Administrative and Commercial Law of the Committee of the Judiciary of the House of Representatives. Submitted March, 1999.

Summary of Amicus Brief (Jan 04) in support of the Sixth Circuit's decision in Hood v. Tennessee Student Assistance Corp. , 319 F.3d 755 (6 th Cir. 2003). There the Sixth Circuit rejected the State's assertion of sovereign immunity as a defense to a debtor's complaint to have a student loan discharged.

Full Text: Amicus Brief (Jan 04) in support of the Sixth Circuit's decision in Hood v. Tennessee Student Assistance Corp. , 319 F.3d 755 (6 th Cir. 2003). There the Sixth Circuit rejected the State's assertion of sovereign immunity as a defense to a debtor's complaint to have a student loan discharged.

Comment of the Commercial Law League of America and its Bankruptcy Section On Proposed Amendment to the Federal Rule of Bankruptcy Procedure 3004 (“Rule 3004). The proposed amendment alters the existing rule by changing the time when the debtor or trustee may file a proof of claim.

Critical Substantive Issues for Meaningful Bankruptcy Reform Position Paper.  Submitted to United States Congress, March, 2003.

Position Letter sent to Senator Biden on Senate Bill 878: The CLLA strongly disagrees with Congress’ recent action to remove bankruptcy judges from S. 878. Congress should reconsider inclusion of the provisions for additional bankruptcy judges in this important bill.