CLLA's Legislative Positions
CLLA has gone to Washington, DC to promote legislative agendas for bankruptcy and creditor’s rights. This will be our 4th Annual Hill Day. In addition to promoting our positions it gives CLLA a chance to promote the League.
Bankruptcy: Each year CLLA has made significant progress on the following bankruptcy reform efforts:
Venue reform addresses the problem of companies that seek bankruptcy protection in a venue other than its main business location. Many Chapter 11 cases end up being filed in Delaware and Southern District of New York. Trade creditors, among others, become disenfranchised because it does not allow for meaningful participation in the Chapter 11 process if the case is heard only in these remote jurisdictions. Legislation was introduced in the 112th Congress to address the problem. Even though Congress did not pass this proposal the fight will continue in 2017.
Preference reform addresses the problem a creditor encounters when there is not a contemporaneous exchange of money for goods or services and the trustee tries to recapture the money the creditor received. Simply put, the seller of goods or services does not get timely paid. Collection action is pursued, money collected, and then, within the next 90 days the buyer files for bankruptcy protection. For up to two years after the bankruptcy filing, your client (the seller) is asked to disgorge this collected money because your client was treated “preferentially” than other unsecured creditors. Often the Trustee or the Debtor-in-Possession threatens to file suit where the bankruptcy case is pending. Your client has a Hobson’s choice whether it wants to defend a law suit in a foreign jurisdiction or settle. This situation needs to change and we continue to pursue legislation to provide for a fairer outcome..
Creditors’ Rights: This body of law is mostly state determinative. There have been some statutes which have affected our collective client base. It has been a challenge to promote a piece of legislation which would help the majority of our membership.
Politics aside, the 2016 provided CRS with an unprecedented opportunity. Representative Jeb Hensarling R-Texas 5th District and Chair of the House Committee on Financial Services introduced a bill on September 9, 2016 entitled the “Financial Choice Act of 2016". This bill was voted out of the Financial Services Committee but will not be acted upon this session (114th Congress). The bill will be reintroduced with the next Congress and will likely change the Consumer Financial Protection Bureau.
The House members who co-sponsored the Financial Choice Act were:
Randy Neugebauer-19th District of Texas
Blaine Luetkemeyer- 3rd District of Missouri
Bill Huizenga-2nd District of Michigan
Sean Duffy-7th District of Wisconsin
If you or your client contact(s) live in any of the following districts please join us!
Change through the legislative process is not easy nor is it immediately rewarding. We are reaching out to other organizations to work together to have our collective concerns heard. The success of Hill Day will depend on large part on the story we can tell. We all saw the TV ads when a voter appeared on television to state how a particular issue has an effect on his/her life.
We NEED stories such as:
a) Your local client was harmed because a Delaware/New York bankruptcy made it too difficult for you to actively pursue or defend your claim in a remote jurisdiction.
b) Or, if a trustee or debtor-in-possession filed preference action, even after your client had cooperated with the debtor during the 90-day period before a bankruptcy was filed.
c) You or your client had to spend thousands of dollars to comply with the CFPB requirements;
d) You lost clients because they decided to consolidate placements with one firm because of auditing costs.
If you can’t go to DC for Hill Day then please help us help your firm AND your clients.
Contact Stephen Sather, Jim Kozelek or Dan Kerrick to find out how you can help!
Call 202.408.4870 or 877.782.9444
Mention Group Code: CLA
Rooms must be reserved by January 27, 2017 to receive the CLLA rate of $219.