S.1914 - Business Bankruptcy Reform Act105th Congress (1997-1998)
|Sponsor:||Sen. Grassley, Chuck [R-IA] (Introduced 04/02/1998)|
|Committees:||Senate - Judiciary|
|Latest Action:||Senate - 06/01/1998 Subcommittee on Oversight and Courts. Hearings held. (All Actions)|
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Summary: S.1914 — 105th Congress (1997-1998)All Information (Except Text)
Introduced in Senate (04/02/1998)
TABLE OF CONTENTS:
Title I: Health Care and Employee Benefits
Title II: Financial Instruments
Title III: Ancillary and Other Cross-Border Cases
Title IV: Small Business Bankruptcy
Title V: Bankruptcy Tax Issues
Title VI: Miscellaneous
Business Bankruptcy Reform Act - Title I: Health Care and Employee Benefits - Amends the Federal bankruptcy code to prescribe guidelines for disposal of the patient records of a health care business (including a hospital, a health maintenance organization, or a nursing home) that commences a proceeding for debtor relief. Provides for disposal with a State or Federal agency, the patient or an insurance provider, or by destruction.
(Sec. 103) Allows an administrative expense claim for the costs of closing a health care business, including disposal of patient records and transfer of patients to another health care business.
(Sec. 104) Requires the bankruptcy court to appoint an ombudsman to represent the interests of the patients of a health care business within 30 days after commencement of a case under chapter 7 (Liquidation), 9 (Adjustment of Debts of a Municipality), or 11 (Reorganization).
(Sec. 105) Requires the bankruptcy trustee to use all reasonable and best efforts to transfer patients from the health care business in the process of being closed to an appropriate substitute.
(Sec. 106) Allows employee pension plan contributions to be treated as an administrative expense of the debtor's estate. Provides for continuance of certain pension plan contributions by the bankruptcy trustee.
(Sec. 108) Excludes from the property of the debtor business estate certain payroll deductions for health care insurance or pension contributions held by the debtor employer.
Title II: Financial Instruments - Revises the definitions of forward contract, repurchase agreement, swap agreement, and securities and commodities contracts, and defines master netting agreement. States that the filing of a petition for debtor relief does not operate as an automatic stay against the setoff by a master netting agreement participant of a mutual debt and claim under or in connection with one or more such agreements in specified circumstances. Revises the exception to the automatic stay for mutual debt and claim setoffs in connection with a swap agreement.
(Sec. 205) Prohibits the bankruptcy trustee from avoiding a master netting agreement participant transfer made before commencement of a case for debtor relief. Includes master netting agreements within the range of fraudulent transfers avoidable by such trustee.
(Sec. 207) Prohibits any stay or limitation on the exercise of contractual rights to terminate or accelerate: (1) securities contracts or repurchase agreements (unless authorized by specified law); or (2) forward and commodity contracts, swap agreements, master netting agreements, or "across" contracts.
(Sec. 210) Declares that any provision of the bankruptcy code relating to securities contracts, commodity contracts, forward contracts, repurchase agreements, swap agreements, or master netting agreements shall apply in a case ancillary to a foreign proceeding so that enforcement of the pertinent financial instruments shall not be subject to a stay or other limitation in bankruptcy.
(Sec. 211) Declares that the exercise of rights by certain commodity brokers and stockbrokers shall not affect: (1) the priority of any unsecured claim such a person may have after the exercise of such rights; or (2) the application of the bankruptcy code with respect to customer property or distributions after the exercise of such rights.
(Sec. 213) Amends the Federal Deposit Insurance Act to authorize the Federal Deposit Insurance Corporation to prescribe detailed recordkeeping requirements for insured depository institutions regarding qualified financial contracts (including market valuations).
(Sec. 214) Amends the bankruptcy code to declare that damages with respect to specified financial instruments shall be measured as of the earlier of the date of rejection, or the liquidation, termination, or acceleration date.
(Sec. 215) Excludes from the property of the debtor's estate any eligible asset (or proceeds thereof) transferred by the debtor before commencement of the action for relief to an eligible entity in connection with an asset-backed securitization.
Title III: Ancillary and Other Cross-Border Cases - Expands the scope of bankruptcy law to incorporate the Model Law on Cross-Border Insolvency, and to establish a statutory mechanism for: (1) dealing with cases of cross-border insolvency; and (2) cooperation between U.S. courts, trustees, and debtors and their foreign counterparts. Prescribes guidelines for: (1) access by foreign representatives and creditors to Federal and State courts; (2) recognition of a foreign proceeding and relief; (3) cooperation and direct communication with foreign courts and representatives; and (4) concurrent proceedings and the coordination of foreign and domestic proceedings.
Title IV: Small Business Bankruptcy - Amends chapter 11 (Reorganization) of the bankruptcy code to set forth mandatory factors for court consideration in determining whether the disclosure statement regarding a small business reorganization plan provides adequate information.
(Sec. 403) Directs the Advisory Committee on Bankruptcy Rules of the Judicial Conference (Advisory Committee) to propose for adoption standardized disclosure statements and plans of reorganization for small business debtors.
(Sec. 404) Sets forth uniform national reporting requirements for small business debtors.
(Sec. 405) Directs the Advisory Committee to propose for adoption revisions to the Federal Rules of Bankruptcy Procedure and Official Bankruptcy Forms enabling small business debtors to comply with such uniform national reporting requirements.
(Sec. 406) Prescribes the duties of a trustee, debtor in possession, and bankruptcy administrator in small business cases. Revises plan filing and confirmation deadlines and the duties of the U.S. trustee.
(Sec. 412) States that, with specified exceptions, the filing of a small business debtor reorganization petition does not operate as a stay of specified debtor acts, if the debtor is, was, or within the previous two years has been the debtor in another small business case.
(Sec. 413) Revises the circumstances under which a chapter 11 (Reorganization) small business case may be converted to a chapter 7 (Liquidation) case or dismissed. Changes from discretionary to mandatory a court's authority to convert or dismiss for specified cause. Specifies circumstances in which such a case shall not be converted or dismissed.
(Sec. 414) Redefines "single asset real estate" to include: (1) undeveloped real property; and (2) a commonly controlled group of entities all of which are concurrently debtors in a case under chapter 11, other than the business of operating the real property and incidental activities.
(Sec. 415) Sets forth additional guidelines for confirmation of a reorganization plan.
(Sec. 416) Revises the exception to the requirement that a court grant relief from an automatic stay of an act against single asset real estate by a secured interest creditor. Allows an automatic stay for such property in certain circumstances within 30 days after the court determines the debtor is subject to such exception (or, as currently, within 90 days after entry of the order for relief, whichever is later). Revises the circumstance where a debtor has commenced monthly payments to each secured interest creditor to allow the debtor, in the debtor's sole discretion, to make such payments from rents or other income generated before or after the commencement of the case by or from the property. Requires such payments in an amount equal to the interest on the value of the creditor's interest in the real estate, determined at the then-applicable contract rate of interest (currently, at the fair market rate).
Title V: Bankruptcy Tax Issues - Modifies guidelines governing notice of the commencement of a case for relief of a debtor to the governmental unit listed by the debtor as its creditor.
(Sec. 501) Directs the Advisory Committee to propose for adoption: (1) certain revised rules for debtor notice to a governmental unit which is either its creditor or regulatory authority; and (2) rules for a governmental unit to designate the manner in which a trustee may petition for a determination of any unpaid tax liability incurred by the estate during administration of the case.
(Sec. 503) Designates the interest rate applicable to tax claims arising before the date of the order for relief. Modifies priority guidelines governing the tolling of allowed unsecured claims of governmental units. States that reorganization plan confirmation does not discharge a corporate debtor from any debt for a tax or customs duty with respect to which the debtor filed a fraudulent return or willfully attempted to evade or defeat the tax or duty.
(Sec. 507) States that a petition for debtor relief operates as a stay of a U.S. Tax Court proceeding regarding the debtor's tax liability only for a taxable period ending before the order for relief. Authorizes appeals from Tax Court decisions.
(Sec. 508) Requires that the periodic payment of taxes in chapter 11 cases be quarterly or more frequently.
(Sec. 509) Proscribes the avoidance of statutory tax liens which are not perfected or enforceable at the time of commencement of a case against certain bona fide purchasers.
(Sec. 510) Amends the Federal judicial code to mandate that court personnel conducting a business under court authority pay each tax when due in the course of that business (except with respect to a property tax secured by a lien against property of the estate that is abandoned by the bankruptcy trustee).
Mandates payment of ad valorem taxes. Provides that a governmental unit shall not be required to file a request for payment of administrative expense taxes.
(Sec. 515) Declares that the filing of a petition for debtor's relief shall not operate as a stay of the setoff of an income tax refund by a governmental unit for any taxable period ending before the order for relief against an income tax liability, unless before the setoff an action is commenced to determine the amount or legality of that tax liability.
Title VI: Miscellaneous - Amends guidelines for: (1) rejection and surrender of executory contracts and unexpired leases; (2) allowance of claims or interests; (3) expedited appeals of bankruptcy cases to courts of appeals; and (4) changes in membership in creditors' and equity security holders' committees.
(Sec. 605) Amends the Bankruptcy Judges, United States Trustees, and Family Farmer Bankruptcy Act of 1986 to repeal the sunset of chapter 12 (Adjustment of Debts of a Family Farmer with Regular Annual Income) (thus making it permanent).
(Sec. 606) Declares, with respect to certain cases ancillary to foreign proceedings, that the bankruptcy court may not grant relief to a foreign insurance company that is not engaged in the business of insurance or reinsurance in the United States with respect to any claim made by a U.S. creditor against: (1) a deposit required by applicable State insurance law; (2) a multibeneficiary trust required by applicable State insurance law to protect U.S. policyholders or claimants against a foreign insurance company; or (3) a multibeneficiary trust authorized under applicable State insurance law to allow a domestic insurance company that cedes reinsurance to the debtor to reflect the reinsurance as an asset or deduction from liability in the ceding insurer's financial statements.