[Congressional Record Volume 140, Number 145 (Friday, October 7, 1994)]
[Senate]
[Page S]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: October 7, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
           SECTION 216 (STATUTE OF LIMITATIONS) OF H.R. 5116

  Mr. HEFLIN. Mr. President, I rise today to speak about section 216 of 
H.R. 5116 regarding limitations on avoiding powers of the bankruptcy 
trustee or estate representative.
  The overriding purpose of any statute of limitations is to provide a 
definite and reasonable period of time for a plaintiff to provide 
potential defendants with notice of the time during which they may be 
at risk of suit so that they may take steps to preserve documents and 
witnesses necessary for their defense. The majority of circuits which 
have ruled on the issue regarding the statute of limitations contained 
in section 546(a) have held that, an avoidance action must be brought 
within two years of the filing of a chapter 11 petition, even if a 
trustee or other estate representative is subsequently appointed or the 
case is later converted, is intended to facilitate prompt and efficient 
resolution of bankruptcy cases. A need to provide a period of time for 
a later appointed bankruptcy estate representative to investigate and 
institute actions has been identified; this balances the rights of all 
parties by preserving the two year statute of limitations for estate 
representatives, and by providing for a maximum of three years if a 
trustee or estate representative is appointed during the initial two 
year period. This amendment prevents prejudice against potential 
defendants that would result from having to defend stale actions and 
should encourage estate representatives to investigate and resolve 
actions earlier in a bankruptcy case, thus minimizing estate expenses 
and maximizing the value of the estate to all creditors.

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