< meta name="DC.Date.Valid.End" content="20050825"> Amendment Nine: Bankruptcy Amendment Rundown

Sunday, March 13, 2005

Bankruptcy Amendment Rundown

Sorry for the late post, vulture business is heating up again. Here's the word on the amendments to the this past week's bankruptcy bill.

The conflict of interest problem referenced below was defeated and investment bankers who lent and now want to sell the restructure are still barred. This just makes good common sense in my view, and I applaud the SEC for sticking to its guns.

Transfers to Asset Protection Trust - The Talent amendment (D-MO) limits transfers made to asset protection trusts which are (allegedly Fed. X tells me) bankruptcy remote. Trustees can avoid transfers within 10 years of the petition date where the transfer was made to a trust created with "actual intent" to hide from the bankrupt estate. A broader amendment seeking to close the "millionare's loophole" in these asset protection trusts was defeated. Again, Federalist X and some others I've spoken to say this whole thing could be made moot as a matter of law given certain scenarios. We'll just wait and see about that.

Means test - all amendments here were defeated except one, an exemption from the means test for disabled vets who incur debt while on active duty. If your a debtor-attorney with clients in Iraq, tell them to get shot.