[Congressional Record Volume 143, Number 1 (Tuesday, January 7, 1997)]
[Extensions of Remarks]
[Pages E21-E22]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




            BANKRUPTCY LAW TECHNICAL CORRECTIONS ACT OF 1997

                                 ______
                                 

                         HON. JOHN CONYERS, JR.

                              of michigan

                    in the house of representatives

                        Tuesday, January 7, 1997

  Mr. CONYERS. Mr. Speaker, today I am introducing the Bankruptcy Law 
Technical Corrections Act of 1997. This legislation provides a number 
of much-needed technical corrections and updates to our bankruptcy 
laws.
  Many of the changes identified in the bill are designed to remedy 
drafting errors in the Bankruptcy Reform Act of 1994, while others 
relate to provisions in the Bankruptcy Code which pre-date the 1994 
changes. The legislation is based in part on a series of changes 
brought to Congress' attention by the nonpartisan National Bankruptcy 
Conference last Congress, many of which were incorporated into S. 1559, 
the Bankruptcy Technical Corrections Act of 1996.
  Among other things, the bill I am introducing today updates a number 
of definitions, clarifies that debtors' attorneys may be compensated 
out of the debtor's estate, clarifies the types of professional 
services which are eligible for administrative expense treatment, and 
provides that the 1994 amendments to section 525(c) apply only to bar 
discrimination concerning students loans and grants because of prior 
bankruptcies.
  The bill also specifies that in 1994, when Congress overruled the 
Deprizio line of cases, we intended the new law to apply to transfers 
of liens in property. In addition, the bill modifies section 365 of the 
Bankruptcy Code to, among other things, make it clear that subsection 
(b)(2)(D), providing an exception to the obligations which must be 
cured in order for

[[Page E22]]

the trustee to assume a lease, covers penalty rates as well as penalty 
provisions, thereby overruling In re Claremeont Acquisition Corp., 186 
B.R. 977, 990 (C.D. Cal. 1995).
  The bill also clarifies and updates a number of matters relating to 
trustees. Among other things, the legislation clarifies the procedure 
for electing private trustees in chapter 11 cases, specifies that 
trustees may operate in a full range of professional capacities and 
retain brokers who work under a range of compensation arrangements, and 
eliminates the outdated trustee residency requirement in chapter 7 
cases.
  Finally, the bill eliminates the construction of the Bankruptcy Code 
which prevented nonindividuals from bringing actions for violations of 
the automatic stay, and conforms the grace period for filing security 
interests under section 547 to 20 days--consistent with other 
provisions in the Bankruptcy Code.
  With a record million plus bankruptcy filings in 1996, it is 
essential that we act to smooth the operation of our insolvency laws. 
These technical changes will benefit both debtors and creditors, and 
it's my hope that Congress can quickly take up and pass this bill 
during the 105th Congress.

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