NACM, as part of its ongoing Government Affairs Committee, has gathered a group of nearly a dozen elite trade credit professionals as part of a committee tasked specifically with setting a course for the association’s effort to push reform of Chapter 11 in 2015. The committee aims to establish a strong NACM legislative platform, which will be brought to Capitol Hill this year. Among Bankruptcy Code areas being reviewed by the NACM committee are preferences, Section 503(b)(9), venue provisions, creditors’ committees, executory contracts and provisions for very small businesses.
At present, no existing proposals for deep reform of the U.S. Bankruptcy Code carry real momentum in either house of the U.S. Congress. However, given that the current makeup of the U.S. Congress includes some committee leadership that has been amenable to pushing past changes considered fair and friendly to B2B creditors, bankruptcy reform will very likely find its way onto the radar of top federal lawmakers within the next year.
A natural starting point for the committee has been to analyze bankruptcy reform recommendations made by the American Bankruptcy Institute (ABI) Commission to Study the Reform of Chapter 11 in a 400-page report on some of the issues mentioned above (an NACM article on some of its findings is available here. Notably, NACM members fought to preserve Section 503(b)(9) during testimony at a standing-room-only ABI commission field hearing at the 2013 Credit Congress in Las Vegas—the subsequent ABI report made no recommendation to scrap Section 503(b)(9) provisions, as some initially feared would occur.
ABI plans to present its findings and final recommendations, which may yet be altered, to Congress by late 2015 or early 2016. However, unlike NACM, ABI is prohibited from lobbying. The NACM committee will look to areas where it believes there is common ground with the ABI commission. However, even in cases in which the committee disagrees with ABI’s recommendations, NACM Government Affairs will continue to lobby on behalf of its members’ best interests regarding numerous important Chapter 11 reform topics.