Bankruptcy Update

On Tuesday, the House of Representatives passed by voice vote a measure (H.R. 5472) that would extend Chapter 12 bankruptcy protection for family farmers until June 30, 2003. The extension was required because the language to make Chapter 12 a permanent part of the bankruptcy code is contained in the larger bankruptcy bill that is not moving.

Congressman Jim Sensenbrenner (R-WI), Chairman of the House Judiciary Committee, does not want a separate bill for the Chapter 12 treatment because he hopes to use the language in the omnibus bankruptcy bill as a means to maintain pressure for ultimate passage of that legislation.

It is expected that the Senate will take up the Chapter 12 extension sometime next week. There does not appear to be any opposition to the proposal.

As previously reported to you, the Senate Judiciary Committee has been unable to consider a series of bills that would amend the bankruptcy code to provide greater protections for employees, retirees, vendors and stockholders in bankruptcy cases. The bills, S. 2798, S. 2820, and S. 2901, all are legislative reactions to the high-visibility corporate bankruptcies investigated by Congress over the past few months. It is unlikely the committee will consider the bills this year and there are no comparable bills on the House side.

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