Legislation Committee Newsletter

vol 18, num 1 | January 2021

Legislation

AN ABI COMMITTEE NEWSLETTER

Visit the Legislation Committee page

► IN this issue:

ABI Legislation Committee 2020 Co-Chair Corner
ABI Letter Urges Congressional Leadership to Consider Bankrupt Debtors Eligible to Access PPP Funding

ABI Legislation Committee 2020 Co-Chair Corner

Ferve Khan
Co-Chair
BakerHostetler
New York

Elizabeth E. Stephens
Co-Chair
Sullivan Hill Rez & Engel, APLC
Las Vegas

ABI’s Legislation Committee had a very active year in 2020. We tracked legislation and provided guidance for ABI members, presented a very well-attended webinar about chapter 12, published numerous newsletters, and hosted a well-regarded panel at the Winter Leadership Conference and a virtual happy hour for membership engagement. Information about our 2020 activities is outlined below. We believe 2021 will also have robust legislative activity, and we look forward to continuing to provide guidance and other valuable content to members.

Ferve Khan
Beth Stephens
Committee Co-Chairs

Special Projects/Legislation Tracking
We have been tracking several pieces of legislation this year, including the CARES Act and the HEALS Act, and the recent bill to alter trustee fees. We have been providing newsletter articles and listserv postings on these topics for the benefit of ABI members.

In addition, Beth Stephens prepared an ABI Journal article on the three pieces of new legislation in the HEALS Act in October 2020. This was also the topic for the ABI Happy Hour that the committee hosted in November (discussed below).

Webinars
On May 20, 2020, we hosted the “Update Your Chapter 12 Skills” webinar, which featured Bankruptcy Judge Robert L. Jones (N.D. Tex.), Joseph A. Peiffer of AG & Business Legal Strategies (Cedar Rapids, Iowa) and Chapter 13 Trustee Ronda J. Winnecour (Pittsburgh). It was very well attended. View Online.

Winter Leadership Conference
For the 2020 Winter Leadership Conference, we paired with the Consumer Committee to discuss the ABI Consumer Commission Final Report’s Top 10 Wishlist. The panel discussed the top 10 items that came out of the Commission’s Final Report, released in April 2010. Speakers were David Cox of Cox Law Group in Lynchburg, Va.; Bankruptcy Judge Daniel P. Collins of the District of Arizona in Phoenix; Adam Herring of the U.S. Department of Justice in Washington, D.C.; and Ted King of Frost Brown Todd in Cincinnati. We received positive feedback from the attendees on the quality of the program. View Online.

Newsletter
In May 2020, we published a newsletter focused on the Small Business Reorganization Act (SBRA). Authors Linda Knight and Thomas Forrester of Gullet, Sanford, Robinson & Martin, PLLC in Nashville, Tenn., drafted a summary of the legislation. Author Amanda Hunt of the Chapter 13 Trustee’s Office in Las Vegas prepared an article on the effect of the CARES Act on the SBRA.

In August 2020, we circulated to our listserv and newsletter an article prepared by committee member John Flanagan, a law student at the University of Illinois College of Law, who summarized the HEALS Act.

In October 2020, we published a joint newsletter with the International Committee focusing on the UNCITRAL draft convention for a simplified insolvency regime. Author Donald Wyatt of Wyatt PLLC in The Woodlands, Texas, prepared a broad summary of the convention, while author Prof. Marcello Gaboardi of the Bocconi University Law School in Milan, Italy, focused on the stay provisions of the convention.

ABI Happy Hour
On Nov. 18, 2020, the committee hosted an ABI Virtual Happy Hour. Members of the committee spoke about the committee’s projects and legislative developments. The Happy Hour was well-attended, and we received positive feedback from attendees, including someone who joined the committee after attending! Register for future happy hours.

ABI Letter Urges Congressional Leadership to Consider Bankrupt Debtors Eligible to Access PPP Funding

The American Bankruptcy Institute (ABI) sent a letter to congressional leadership in December requesting Congress to make it clear in any future amendments or legislation addressing Paycheck Protection Program (PPP) funding that debtors who have filed bankruptcy cases remain eligible for PPP loans, notwithstanding their respective bankruptcy filings. “ABI is not advocating that Congress mandate PPP assistance to any particular borrower, or category of borrowers, in a case pending under the Bankruptcy Code,” ABI Executive Director Amy Quackenboss wrote in the letter. “However, it is imperative that bankruptcy debtors remain eligible for PPP funding if they otherwise satisfy the borrowing requirements. PPP funding may facilitate a successful reorganization under the Bankruptcy Code, and it certainly facilitates the PPP’s goals, which include the preservation of paying jobs.”

Click here to read ABI’s letter.

PPP loans, created as part of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), have served as a lifeline to many small businesses who have suffered economic distress as a result of the COVID-19 pandemic and resulting shutdown. The Small Business Administration (SBA) issued a ruling on April 24, 2020, that effectively made otherwise-eligible debtors in bankruptcy ineligible for a PPP loan. “We do not intend to comment on the legality of that ruling, which is currently being litigated in courts across the country, but instead, we write to request that Congress (i) consider the negative policy implications of the SBA’s ruling, and (ii) clarify in future legislation that otherwise-deserving small businesses, family farmers and individuals are eligible to receive PPP funds notwithstanding their pending bankruptcy cases,” Quackenboss said in the letter.

“It is unclear why the SBA determined that persons or entities ‘presently involved in any bankruptcy’ are ineligible for PPP assistance,” according to the letter. “In our view, this provision unnecessarily discriminates against debtors in bankruptcy.”

While urging congressional consideration of the issues presented, ABI is not taking a position or commenting on any legislation in which PPP loans may be addressed by Congress.