Senate Committee Adds New Rules Affecting Corporate Restructuring
The Senate Judiciary Committee last Thursday (Feb. 17) adopted two amendments by Sen. Kennedy to the Bankruptcy Reform bill that could have implications for corporate restructuring professionals. The actual language (see below) should be read carefully. The legislation (S. 256) is on an extraordinarily fast track, scheduled for debate beginning next week.
Should the managers of the bill successfully defeat other amendments on the floor, this “clean” bill could be taken up and passed quickly by the House in the identical form (as the House did with the recently-passed Class Action Reform bill, which was promptly signed into law by the President). Thus these provisions have a high probability of becoming law, unless changed on the Senate floor.
ABI members with comments should immediately direct them to the Senate Judiciary Committee.
Amendment No. 1
The purpose of the amendment is to provide for the appointment of a trustee in cases of suspected fraud. It appears to require the U.S. Trustee to move for the appointment of a trustee “if there are reasonable grounds to suspect…actual fraud, dishonesty or criminal conduct in the management of the debtor or the debtor’s public financial reporting.”
Amendment No. 2
The purpose of the amendment is to expand the authority of the bankruptcy courts to limit retention bonuses and severance pay to corporate insiders. It also appears to limit the ability to retain consultants hired after the date of the filing of the petition.
Agenda for the 2005 Annual Spring Meeting
Bringing a Prearranged Plan Together—Can We Agree to Agree?
The Financial Advisors and Young and New Members Committees will present a joint program at the 2005 Annual Spring Meeting at 9:30 a.m. on Saturday, April 30, 2005. Join us to discuss the varying constituencies and dynamics when negotiating a prearranged plan of reorganization. Hear a panel discussion from the viewpoints of the Company, investment bankers, buyers of distressed debt, senior lenders and lawyers that focuses on the process of negotiating and implementing a prearranged plan, the role of various players and advisors in the process, key factors for success and recent case examples.