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U.S. Lawmakers Strike Deal on Bankruptcy
Overhaul
Congressional negotiators said yesterday they had reached a tentative
deal on final legislation to overhaul the U.S. bankruptcy system to make
it harder for individuals to wipe out their debts, Reuters reported. 'I
think we're there,' House Judiciary Committee Chairman Henry Hyde told
reporters after a meeting of key Republican lawmakers involved with the
bill. 'We think we have it resolved,' said Senate Judiciary Committee
Chairman Orrin Hatch. Both the House Senate cleared the bankruptcy
overhaul by wide margins but, due to procedural issues, no formal
conference committee has been convened to reconcile the two versions,
and Republican negotiators have been working on a behind-the-scenes deal
to attach the final bill to an unrelated conference report.
The legislation would move bankruptcy toward a 'needs-based' system,
where debtors would be subject to means-testing. While full details of
the deal were not yet available, lawmakers said they believed they had
resolved most of the issues still standing in the way of the bill's
passage, including a Senate provision making court judgements related to
abortion clinic violence non-dischargeable in bankruptcy, which Hyde
said would be broadened to include other types of violence. 'We are
going to put some language together that removes the focus on abortion,'
he said. Another point is a provision that would have allowed consumers
to waive current protections against having retirement assets seized by
creditors in bankruptcy. Negotiators decided to instead provide
protection for retirement assets only up to a defined amount. 'We talked
about and settled on a cap,' said Pennsylvania Republican Rep. George
Gekas, who chairs the House Judiciary Subcommittee on Commercial and
Administrative Law.
The negotiators also decided not to include in the final bill any new
provision to intervene in a battle between the Federal Communications
Commission and bankrupt carrier NextWave Telecom Inc. over dozens of
valuable wireless licenses. 'We agreed that if an item was not in either
the House or Senate bills it would not be included in the conference
report,' Senate Majority Leader Trent Lott said. However, Hyde said the
negotiators had 'not completely' settled the question of homestead caps.
Poor-credit Lender ContiFinancial Files Chapter 11
ContiFinancial Corp., which lends money to people with poor credit
histories, said yesterday it filed for chapter 11, according to Reuters.
The New York-based lender said it reached a definitive agreement last
week to sell its ContiMortgage home equity loan servicing platform and
rights to Fairbanks Capital Corp., and said it is in negotiations
regarding the future of its loan origination operations. The company
said it has more than sufficient cash resources to meet trade
obligations and employee expenses while in chapter 11.
Bankruptcy Court Grants IHDG Exclusivity Extension
According to a newswire report, the U.S. Bankruptcy Court for the
District of Delaware has granted Imperial Home Decor Group Inc. another
90 days to file a plan of reorganization in its chapter 11 case. IHDG
also has another 60 days after that Aug. 4 date to solicit creditors to
vote for the plan. IHDG's unsecured creditors' committee, along with
IHDG's pre-petition bank lenders, indicated their full support for the
extension, which was approved yesterday in a hearing following the
company's April 12 extension appeal. Cleveland-based IHGD is the world's
largest designer, manufacturer and distributor of residential and
commercial combined wallcovering products.
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