by Jon J. Lieberman
Atkinson Simms & Kermode; Lexington, Ky.
In this edition of the ABI Legislation Committee Newsletter, we highlight Brendan M. Gage’s ABI Law Review article “Should Congress Repeal Bankruptcy Code Section 503(b)(9)?
Gage describes how this code provision has provided vendors with an administrative expense claim for “the value of any goods received by the debtor in its “ordinary course of business.” These twenty day claims are unique because they cannot be paid in part or pro rata like general unsecured claims, nor can they be paid over time through a reorganization plan like secured claims. Rather, all twenty day claims must be paid in full in cash on the effective date of the plan. However, Congress failed to provide any legislative history on why section 503(b)(9) was necessary or what the provision attempted to accomplish.
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by Karen Cordry
National Association of Attorneys General; Washington D.C.
The story goes that a farmer bought a mule from a salesman who told him that if he were polite to the mule, it would do whatever he wanted. After months of being nice – but with no success in getting the mule to work, the farmer asked the salesman for help. The salesman came over, hit the mule on the head with a 2x4 and explained that you did have to be nice – “but first you had to get the mule’s attention.”
It is clear by now that all of the efforts to fix the mortgage disaster in the United States have been greatly hampered by the problems with bad mortgage servicing practices. The poor record keeping, erroneous charges, inability to maintain continuity with borrowers in discussing loan modifications, and the like have contributed greatly to the difficulties seen in the numerous programs that have attempted to help borrowers retain their homes.
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If you are not yet familiar with it, we would like to introduce you to one of our most popular membership benefits, the Interactive Bankruptcy Code & Rules. Provided at no additional cost to ABI members, ABI takes the idea of an online Bankruptcy Code & Rules another step (or two) to provide users with their own personal copy, complete with your bookmarks and annotations, plus relevant case law for each section and rule (provided by our site partner LexisNexis Matthew Bender).
Click here to view the Bankruptcy Code & Rules (http://law.abi.org/).
The 2010 publication, "Municipalities in Peril: The ABI Guide to Chapter 9," looks at how a chapter 9 differs from the other reorganization chapters of the Bankruptcy Code because municipality debtors are different from other debtors, with special rules and practices for fundamental issues of governance, credit and debt adjustment. Written by ABI members H. Slayton Dabney, Jr., Patrick Darby, Daniel G. Egan, Marc A. Levinson and George B. South III, the book also includes a convenient summary of all state statutes authorizing (or not authorizing) municipalities to seek chapter 9 relief and a comparison of key features of chapter 9 and chapter 11.
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