February 7, 2000
H.R. 833-S. 625 Conference Process
Now that the Senate passed S. 625, the bill will go to conference, along
with the House bankruptcy bill, H.R. 833. The conference members from
both the House and Senate have not been chosen. Once they are chosen,
there will be an ironing out of the process to reconcile all the
differences between the two bills. There is no fixed length of time as
to how long the bills will be in conference. The conference committee
will draft a committee report, and both houses will vote on that report
without the ability to amend it further. It will then be sent to the
president for his signature/veto. President Clinton has exactly one week
from when he receives a bill to sign or veto it. Both bills now have an
effective date of 180 days after the date of enactment, when the
president signs the bill or it is passed over his veto.
S.D. Texas Judges Issue General Order for Complex Chapter 11
Cases
The bankruptcy judges of the Southern District of Texas have issued a
general order, effective Jan. 11, 2000, that implements new procedures
for the handling of complex chapter 11 cases. These procedures include
1) designation of a chapter 11 filing as a complex chapter 11 case by a
notice filed with the petition, citing one or more of a number of
criteria as a basis for the designation; 2) immediate assignment of the
case to one of the judges delegated to handle complex chapter 11 cases;
3) hearings on first-day orders within two business days of the filing
of the petition; 4) increased use of telephonic hearings, especially for
emergency or expedited hearings; 5) simplified notice procedures based
on a service list maintained by the debtor; 6) established weekly
hearing dates for motions and other matters; 6) approval of agreed
orders without the requirement of additional notice if the scope of the
order does not exceed that contemplated by the motion and any objections
filed. The complete text of the general order and the work order
assigning judges to the complex chapter 11 docket is online at
http://www.txs.uscourts.gov/judges/judgeban.htm.
The new general order was issued after consideration of a report
submitted to the judges by the Chapter 11 Advisory Committee for the
Southern District of Texas just before the end of December. The
committee, which was composed of 12 lawyers representing a broad
cross-section of local chapter 11 practitioners, was appointed by the
bankruptcy judges to identify the means by which the bankruptcy courts
for the Southern District of Texas could be made more user-friendly for
complicated chapter 11 cases. The committee¹s report made a number
of specific recommendations, many of which were incorporated in the
procedures implemented by the general order. The judges and the
committee stress that their efforts to improve the administration of
complex chapter 11 cases are a work in progress. A bench-bar workshop is
planned in April to discuss the new procedures and to identify other
areas of improvement.
NextWave Seeks Reconsideration of December Second Circuit
Decision
NextWave Telecom Inc., Hawthorne, N.Y., asked the U.S. Court of Appeals
on Friday for the Second Circuit to reconsider its Dec. 22 decision on
NextWave¹s fraudulent conveyance action against the Federal
Communications Commission (FCC), according to a newswire report. The
Second Circuit¹s decision reversed lower court determinations that
the FCC engaged in a constructive fraudulent conveyance by demanding
$4.7 billion for PCS spectrum licenses the agency granted to NextWave at
auction in 1997. NextWave¹s request for reconsideration was
necessitated by the FCC¹s refusal to accept NextWave¹s recent
offer to pay its remaining $4.3 billion license obligation in full and
put the PCS spectrum covered by those licenses into immediate use. The
company said in a statement, ³The need for reconsideration of the
Second Circuit¹s decision has become more compelling recently, due
to the FCC¹s efforts to distort the decision and make an end-run
around Bankruptcy Doe protections...Those efforts, if allowed to
succeed, would seriously undermine the normal interaction of regulated
companies and financial markets.² NextWave said the Second
Circuit¹s ruling overlooks ³directly applicable provisions of
the bankruptcy laws that grant bankruptcy courts authority to conduct
proceedings like that brought by NextWave against the FCC.² The
petition asks the three-judge panel that originally decided the appeal
to reconsider its ruling in order to correct the legal errors identified
in the petition.
CellNet Files Chapter 11
CellNet Data Systems Inc., San Carlos, Calif., announced Friday that it
has filed for chapter 11 protection in the District of Delaware,
according to a newswire report. As previously announced Feb. 1, the
board of directors approved a proposed asset acquisition by Schlumberger
Resource Management Services (RMS), a business unit of Schlumberger
Ltd., for $55 million in cash, the repayment of assumption of certain
secured financing in the amount of approximately $120 million and the
assumption of certain other liabilities. The acquisition will be handled
through the chapter 11 filing and is subject to higher bids and court
approval. CellNet anticipates completing the transaction by the end of
April.
GTS Announces Sale of Phone Card Assets
Global Telecommunications Solutions Inc. (GTS) announced that certain of
its subsidiaries involved in the traditional phone card business and
currently in bankruptcy have entered into an agreement to sell all of
their assets to JD Services Inc., a prepaid phone card provider in Salt
Lake City, according to a newswire report. The sale of the assets is the
final step in the discontinuance of the company¹s legacy phone card
business. Upon completing the sale, the company will focus on developing
its other subsidiaries. JD Services will pay an aggregate of $2.1
million as follows: (i) forgiveness of approximately $750,000 in
debtor-in-possession financing previously provided to the subsidiaries,
and (ii) an auction of about $1.35 million of the company¹s
obligation to provide telecommunications services to previously
activated phone cards.
Criimi Mae Announces Agreement
Criimi Mae Inc., Rockville, Md., announced that it and Morgan Stanley
& Co International Ltd. have agreed to a final settlement of an
adversary proceeding brought by Criimi Mae in the bankruptcy case
involving it and its subsidiaries, according to a newswire report. The
agreement calls for the sale of seven classes of subordinated commercial
mortgage-backed securities that were part of the financing by Morgan
Stanley, together with the related unrated bond. The agreement also
calls for a final settlement of all adversary proceedings between the
two parties; Criimi Mae has filed a motion with the bankruptcy court
asking Bankruptcy Judge Duncan W. Keir to approve the agreement. A
hearing is scheduled for. Feb. 28.
Two Bankruptcy Judgeships Available in Eastern District of
California
The U.S. Courts for the Ninth Circuit is recruiting for two
positions on the Bankruptcy Court for the Eastern District of
California. Chambers for the new judges will be in Fresno and Modesto,
Calif. Completed applications must be received by March 31. Visit ABI's
bankruptcy court employment area for details at
href='/employment/listings.html'>http://www.abiworld.org/employment/listings.html.
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