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Lawmakers met Wednesday to stake out their position on the controversial bankruptcy reform bill, and one thing is for certain — the process will be contentious. The unusually large conference committee — consisting of 19 House members and 13 Senators who were named to craft a single bill — has about six lawmakers who steadfastly oppose the bill. There is also much dissension over whether the committee should push to complete work on the bill before Congress adjourns for the year, or wait until the next congressional session. Rep. James Sensenbrenner, chairman of the House Judiciary Committee and head of the conference committee, said bankruptcy reform legislation is needed immediately. The Wisconsin Republican said it includes important provisions such as allowing for additional bankruptcy judgeships. The legislation, largely a consumer bankruptcy bill, also includes provisions that would toughen bankruptcy rules to corporations. The most controversial of these are designed to shorten a company’s stay in Chapter 11 even if it raises the risk of liquidation. In addition, the legislation narrows the discretion of bankruptcy judges in allowing a company to work out its problems under Chapter 11 of the U.S. Bankruptcy Code, which was last reformed in 1978. It also would impose deadlines on corporate debtors that do not exist under current law. The next conference committee is scheduled for after the Thanksgiving holiday. With President Bush in the White House, “Any bankruptcy bill will most likely become law,” said Sen. Russell Feingold, a Wisconsin Democrat on the committee. “Thus, what we do here takes on additional importance.” He continued: “We’re about to fundamentally change a legal system … and I hope we act wisely.” Feingold said he opposes the bill because it will make it more difficult for businesses to reorganize under Chapter 11 protection. “We risk serious damage on our economy if we pass it at this time,” he said. Copyright (c)2001 TDD, LLC. All rights reserved.

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