October 15, 2021
UPDATE Bill H.R. 5554
On October 12, 2021 Bill H.R. 5554 was introduced to the House.
Official Title: To amend title 11 of the United States Code to prohibit the payment of bonuses to highly compensated individuals employed by the debtor and insiders of the debtor to perform services during the bankruptcy case, and for other purposes.
Sponsored by Rep. Cheri Bustos (D-IL-17)
Co-sponsored by Rep. Tim Burchett (R-TN-2
September 24, 2021
Press Release From warren.senate.gov
Warren, Cornyn Introduce Bill to Prevent Large Corporations From ‘Forum-Shopping’ in Bankruptcy Cases
Senators Call Out Corporations’ Attempts To Dodge Accountability by Filing Bankruptcy Cases with Favorable Judges
Washington, D.C. — United States Senators Elizabeth Warren (D-Mass.) and John Cornyn (R-Texas) today introduced the Bankruptcy Venue Reform Act of 2021 which would require large corporations and wealthy individuals to file for bankruptcy in their home states or where significant assets are located. In the last 20 years, more than 70% of public companies with at least $100 million in assets filed for bankruptcy in a district outside of the one closest to their headquarters. The legislation would prevent corporations from “shopping” for favorable bankruptcy judges and ensure that small businesses, employees, retirees, creditors, and other stakeholders can fully participate in cases that will have tremendous impacts on their lives. READ MORE
July 13, 2021
Reps. Zoe Lofgren (D-CA) and Ken Buck (R-CO) Introduce H.R. 4193, the Bankruptcy Venue Reform Act
Rolling Meadows, IL, July 13, 2021 – Recently, Reps. Zoe Lofgren (D-CA) and Ken Buck (R-CO), introduced H.R. 4193, the Bankruptcy Venue Reform Act, to reform the venue provisions of the U.S. Bankruptcy Code.
This bipartisan legislation seeks to insert a common-sense requirement into the Bankruptcy Code that companies which elect to file Chapter 11 bankruptcy do so where their principal place of business is located, or where they have their principal assets. Currently, companies are allowed to flee their communities, employees, and local creditors to reorganize in another state or jurisdiction that might be more sympathetic to their interests. Retired Bankruptcy Judge Steven Rhodes (Bankr. E. D. Michigan) commented in the Wall Street Journal (2015) that the current venue law is “the single most significant source of injustice in chapter 11 bankruptcy cases.”
“Under current U.S. law, corporations filing Chapter 11 bankruptcy have the ability to ‘venue shop’ and potentially choose a court that has issued lenient rulings in similar cases. Our bill will require corporations filing Chapter 11 bankruptcy to go through those proceedings in the forum they are primarily located rather than running off to a court across the country. This will eliminate companies’ ability to tilt the scale of justice and ensure the case is heard in a court familiar with all the affected stakeholders,” said Rep. Buck.
The interests of local economies, creditors, employees, and retirees are often ignored when a corporation flees to initiate a proceeding in a remote state. Allowing troubled companies to file in other jurisdictions far from home to achieve desired outcomes directly threatens the integrity of the bankruptcy system by eroding public confidence and calling into question the fairness of a system that can be so easily manipulated.
“The outcome of a Chapter 11 bankruptcy proceeding can have a profound impact on the local community where a corporation is based. It is simply unfair that corporations can game the bankruptcy system by choosing a distant court where there is a cottage industry to advantage their interests. Justice is best served when corporate bankruptcies are adjudicated locally, with convenient court access for employees, retirees, and local creditors and a judge who knows the affected community,” said Rep. Lofgren.
“The introduction of a bankruptcy venue reform bill for the third consecutive legislative session reflects the increasing momentum for passage of this valuable bill,” said Christopher Young, President of the Commercial Law League. “Last session’s House bill garnered the most co-sponsors ever, along with support from the National Association of Attorneys’ General and 163 current and former bankruptcy judges. Long overdue, venue reform will level the playing field for American business in debt collection and bankruptcy enforcement actions. Small business and entrepreneurs, the life blood of the American economy, will no longer be subject to the gamesmanship of forum shopping and the burden of foreign litigation. The League is proud to champion this bill.”
Amending the bankruptcy venue statute has been endorsed by several bar associations from around the country, state legislatures, law school professors, the Iowa Bankers Association, the National Association of Credit Management, the Texas Hotel & Lodging Association, the National Association of Attorneys’ General, and the United Mine Workers of America.
June 16, 2021
Commercial Law League of America Announces Additional Certified Agency:
Alternative Collections, LLC dba: Asset Compliant Solutions (ACS)
Rolling Meadows, IL, June 16, 2021 – The Commercial Law League of America (CLLA) is pleased to welcome Alternative Collections, LLC dba: Asset Compliant Solutions (ACS), Buffalo, NY to the esteemed group of CLLA Certified Agencies. ACS has demonstrated that the agency adheres to relevant regulations in the collection of commercial debt, uses generally accepted accounting practices and follows standards to protect and safeguard their clients’ funds. They join other commercial collection agencies around the country in proudly displaying the Certified Commercial Collection Agency Seal.
Brian Noble, President and CEO of ACS commented on their recent certification, “As a company that continually strives and evolves to be better than we were yesterday, to best serve our customer base our focus will always be on compliance, technology, and professional development. Recognizing what we don’t know, partnering with people who can provide the necessary knowledge and tools is important, such as The CLLA’s Agency Certification Program. We are proud to announce that ACS and its Employee Associates have completed the necessary steps to become a CLLA Certified Agency. This is a credential for our resume, and a signal to our clients, competitors and employees that we set high standards for the delivery of our service suite.”
To find a CLLA Certified Collection Agency near you, visit https://www.clla.org/list-of-certified-agencies/.
March 25, 2021
Commercial Law League of America Announces Additional Certified Agency:
Recovery Management Solutions LLC
Rolling Meadows, IL, March 25, 2021 –The Commercial Law League of America (CLLA) is pleased to welcome Recovery Management Solutions LLC, Cheektowaga, NY to the esteemed group of CLLA certified agencies. Recovery Management Solutions LLC has demonstrated that the agency adheres to relevant regulations in the collection of commercial debt, uses generally accepted accounting practices and follows standards to protect and safeguard their clients’ funds. They join other commercial collection agencies around the country in proudly displaying the Certified Commercial Collection Agency Seal.
Additionally, Recovery Management Solutions LLC has passed an audit conducted by an independent third-party auditing firm. CLLA confirms their compliance with all relevant federal and state laws and regulations governing the collection of debts and in all jurisdictional registration and licensing requirements. The CLLA Certification, endorsed by the International Association of Commercial Collectors (IACC), has set the standard of agency certification in the credit industry since 1975.
To find a CLLA Certified Collection Agency near you, visit https://www.clla.org/list-of-certified-agencies/.
March 25, 2021
Commercial Law League of America Announces 2021 Lawrence P. King Award Recipient
Rolling Meadows, IL, March 25, 2021 – The Commercial Law League of America (CLLA) and its Bankruptcy Section are pleased to announce that they will present the Lawrence P. King Award to the Honorable Laura Taylor Swain at the National Conference of Bankruptcy Judges (NCBJ) in Indianapolis, IN on October 7, 2021.
For more information on CLLA’s events taking place during NCBJ, please visit the Events page on www.CLLA.org.
The King Award: Each year, the Executive Council of the Commercial Law League’s Bankruptcy Section presents the Lawrence P. King Award to recognize a lawyer, judge, teacher or legislator who exemplifies the best in scholarship, advocacy, judicial administration or legislative activities in the field of bankruptcy. The award is designed to recognize the lifetime achievements of Professor King, which include contributing to the practice of bankruptcy law through teaching, by working to elevate the profession and through bankruptcy-related legislative activities.
This year’s recipient — Honorable Laura Taylor Swain — graduated from Hunter College High School in New York City in 1975; and earned her B.A. degree in government from Harvard-Radcliffe College in 1979; and her J.D. degree from Harvard Law School in 1982. READ MORE
March 12, 2021
Biden Signs Third Stimulus Into Law
Rolling Meadows, IL, March 12, 2021 – The U.S. passed a third COVID-19 relief bill, the “American Rescue Plan Act”, on March 11, 2021. The $1.9 trillion package includes $1,400 stimulus checks for qualifying households, unemployment benefits, and expanded the Paycheck Protection Program.
The legislation does not include a $15 federal minimum wage, and there are several things other things it does NOT include! There is no commercial debt amendment to the FDCPA, no blanket debt collection prohibition, no blanket medical debt prohibition, and no blanket student loan cancellation. READ MORE
March 11, 2021
The CLLA Supports Extension of the $7,500,000 Subchapter V Debt Limit
Rolling Meadows, Illinois, March 11, 2021 – Throughout its 126 years of existence, the Commercial Law League of America has consistently promoted and supported the fair, equitable, and efficient administration of collection and bankruptcy laws for all parties-in-interest. The Bankruptcy Code was recently amended to include a new subchapter of chapter 11, through the Small Business Reorganization Act (“SBRA”), referred to as Subchapter V. The SBRA, which became effective on February 19, 2020, provides small businesses with a more streamline process of proposing and confirming a plan of reorganization, as opposed to the more complex and expensive traditional chapter 11 process. Under the original SBRA, Small Business Debtors with less than $2,725,625 of debt were eligible to file under Subchapter V, however, in response to economic circumstances caused by COVID-19, under the CARES Act enacted on March 27, 2020, the debt limit was increased to $7,500,000 for a period of one year, which will sunset on March 27, 2021. DOWNLOAD PDF
November 19, 2020
Commercial Law League of America Announces Additional Certified Agency:
Williams & Williams, Inc.
Rolling Meadows, IL, November 19, 2020 – The Commercial Law League of America (CLLA) is pleased to welcome Williams & Williams Inc., Louisville, KY to the esteemed group of CLLA certified agencies. Williams & Williams Inc. has demonstrated that the agency adheres to relevant regulations in the collection of commercial debt, uses generally accepted accounting practices and follows standards to protect and safeguard their clients’ funds. They join other commercial collection agencies around the country in proudly displaying the Certified Commercial Collection Agency Seal.
“Williams & Williams, Inc. is proud to have passed the rigorous demands of the CLLA certified agency program. CLLA is a leader in the credit networking field, which we have long realized as a CLLA agency member for over 30 years. The prestigious Certified Agency designation is a substantial tool that separates Williams & Williams, Inc. from competitor, non-certified agencies. We look forward to continue serving credit granting professionals and through our mutual partnership with CLLA attorneys,” stated Tony Williams, Vice President.
August 21, 2020
Commercial Law League of America Takes Strong Approach Against Federal Legislation Prohibiting Debt Collections
Rolling Meadows, IL, August 21, 2020 – Continuing the long history of the Commercial Law League of America’s advocacy for the credit and business community, and continuing the decades-long engagement of Webster, Chamberlain & Bean, LLP as our lobbyist, the CLLA has taken a strong approach against federal legislation (such as Senate Bill 3565) that would seek to outright prohibit debt collection, suspend existing lawsuits, as well as amend the Fair Debt Collection Practices Act, to include original creditors and commercial transactions. We staunchly believe that such legislation has a myriad of unintended consequences that would cripple any economic recovery efforts.To that end, the CLLA wishes to thank the International Association of Commercial Collectors and the Commercial Collection Agencies of America, and their contributions to our unified cause against this kind of bad legislation. DOWNLOAD PDF
July 27, 2020
Commercial Law League of America Announces Two Additional Certified Agencies
Rolling Meadows, IL, July 27, 2020 – The Commercial Law League of America (CLLA) is pleased to welcome into the esteemed group of Certified Agencies, NACM Southwest and Northern California Collection Service, Inc. These organizations demonstrate that their agency adheres to relevant regulations in the collection of commercial debt, use generally accepted accounting practices and follow standards to protect and safeguard their clients’ funds. They join other commercial collection agencies around the country in proudly displaying the Certified Commercial Collection Agency Seal.
All CLLA Certified Agencies including NACM Southwest and Northern California Collection Service, Inc. have passed an audit conducted by an independent third-party auditing firm. CLLA confirms their compliance with all relevant federal and state laws and regulations governing the collection of debts and in all jurisdictional registration and licensing requirements. The CLLA Certification, endorsed by the International Association of Commercial Collectors (IACC), has set the standard of agency certification in the credit industry since 1975. DOWNLOAD PDF
To find a CLLA Certified Collection Agency near you, visit https://clla.org/list-of-certified-agencies/.
April 10, 2020
Collection Industry Organizations Support Protecting Stimulus Payments from Garnishment
Three collection industry organizations, the Commercial Law League of America, International Association of Commercial Collectors, and the Commercial Collection Agencies of America, all support any action to protect the Coronavirus Aid, Relief, and Economic Security (CARES) Act (“CARES Act”) stimulus payments to individuals from garnishment. Leadership of all three organizations recognize the extent of the economic crisis and the impact the pandemic has had on our whole economy, but most particularly on small businesses and individual consumers. While many of our members and clients are small business owners who have been significantly impacted by the economic crisis, we agree that the CARES Act stimulus payments should be used by individuals for basic living expenses. We join the recommendation that any stimulus payment paid to an individual under the CARES Act be deemed as exempt from execution, and recommend that the Treasury Department code the individual’s stimulus payment as a federal benefit to ensure it is protected. READ MORE
March 30, 2020
Federal Government Resources for CLLA Members
If your state has received the necessary disaster designation, SBA’s Economic Injury Disaster Loan Program can provide low interest loans in this difficult time. A streamlined application process is now available at https://covid19relief.sba.gov/#
Information on administration and processing for the expanded SBA 7(a) loan program which is part of the CARES Act, which passed on Friday, March 27, 2020, is not yet available. Those loans are to be processed by approved SBA lenders. Your current bank or lender is the best current source for this information, as it becomes available. CLLA Board of Governors member Ted Hamilton, Esq. has published a summary of the CARES Act which may be of assistance in digesting the voluminous law.
Linked below, state specific programs may be available, including state disaster assistance available in:
Brief Summary of the Small Business Sections of the Coronavirus Aid, Relief, and Economic Security Act or the (“CARES Act”) enacted on March 27, 2020.
By: Theodore J. Hamilton, Esq., CLLA Attorney Board Member
This is a brief summary of the Small Business Sections of the third COVID-19 Act (H.R. 748) signed into law by President Trump on March 27, 2020 (herein “The Act” or “Act”). This Act distributes over $2 trillion of federal support to the U.S. Economy. The Act provides specific benefits to Businesses under 500 employees. These benefits include loans with low interest and with forgiveness provisions, tax credits for those that keep their employees working, and unemployment benefits for those laid off. In addition, tax credits are available to individuals. READ MORE
March 28, 2020
Massachusetts Bans Consumer Debt Collection for 90 Days
On March 27, 2020, the Attorney General of Massachusetts announced an enacted emergency regulation making consumer debt collection unfair and deceptive under the State’s Consumer Protection Act. The regulation is effective until the earlier of ninety (90) days or the end of the state of emergency declared by the Governor of Massachusetts. The State’s existing debt collection regulations and other applicable laws remain in effect.
March 27, 2020
Senate Passes Coronavirus Stimulus Bill: New Bankruptcy Amendments
Rolling Meadows, IL – March 27, 2020 – Early on the morning of March 27th, the Senate passed the CARES Act. The bill goes to the House of Representatives where it is expected to pass by unanimous consent. The President is expected to sign the bill.
The bill has some key provisions dealing with bankruptcy, which include the following:
First, the newly enacted Small Business Reorganization Act of 2019 (Chapter 13 for small business) will see an increase in the eligibility threshold from $2,725,625 to $7,500,000.
Second, the definition of ‘income” in the Bankruptcy Code for Chapter 7 and 13 will exclude coronavirus-related payments from the federal government from being treated as “income” for purposes of filing bankruptcy. This provision affects the means test calculation.
Third, “disposable Income” for purposes of confirming a Chapter 13 plan shall not include coronavirus related payments.
Fourth, Chapter 13 debtors may seek plan payment modifications, if they are experiencing a material financial hardship due to the coronavirus pandemic, including extending their payments for up to seven years after their initial plan payment was due.
These provisions will sunset in one year.
Finally, there would be a six month repayment holiday with respect to student loans.
There are also discussions on Capitol Hill that the next phase of COVID19 relief may including expanding the dollar limits for Chapter 13 eligibility. The League is also watching to see if dischargeability of Student loans, an increase in Trustee Commissions and the elimination of credit counseling may work its way into future legislation.
March 27, 2020
CLLA Legal Update: Coronavirus Response Act
Rolling Meadows, IL – March 27, 2020 – Effect of Families First Coronavirus Response Act (FFCRA)H.R. 6201. The United States Congress and the President passed the second coronavirus response act in mid-March of 2020. It passed as House Resolution 6201. (Herein “The Act”) The Act became law on March 18, 2020 amid the Coronavirus outbreak in the U.S. This Act poses dramatic changes to small businesses and sole proprietorships throughout the Country including law firms and collection agencies. It goes into effect on April 3, 2020. Almost all Small Businesses in the U.S. will feel the effects of this law over the next few months.
This Article will provide a brief overview of the Act. It is not intended to be relied upon for a complete analysis of specific applications of the Act in all circumstances. Part of this Act included the Emergency Family and Medical Leave Expansion Act. This EFMLEA Act extends family and medical leave during the a Public Health Emergency to all employers who employ under 500 employees. The current threshold for family and medical leave is any business over 50 employees. As a result, all small businesses and sole proprietorships must now give Family and Medical Leave of up to 12 weeks for Coronavirus related causes. These causes include the following:
- Subject to a Federal, State, or local quarantine or isolation order related to COVID-19;
- Advised by a health care provider to self-quarantine related to COVID-19;
- Is experiencing COVID-19 symptoms and is seeking a medical diagnosis;
- Is caring for an individual subject to a quarantine order or in self-quarantine;
- Is caring for a child whose school or place of care is closed for reasons related to COVID-19;
- Or is experiencing any other substantially-similar condition specified by the Secretary of HHS.
Duration of Leave:
For reasons (1)-(4) and (6) a Full-time employee is eligible for up to 80 hours of leave, and a part-time employee is eligible the number of hours of leave that the employee works on average over a two-week period.
For reason (5): A Full-time employee is eligible for up to 12 weeks of leave at 40 hours a week, and a part-time employee is eligible for leave for the number of hours that the employee is normally scheduled to work over that period.
CALCULATION OF PAY
For Leave reasons (1),(2), or (3): employees taking leave shall be paid at either their regular rate or the applicable minimum wage, whichever is higher, up to $511 per day and $5,110 in the aggregate (over a 2-week period).
For leave reason (4) or (6); employees taking leave shall be paid at 2/3 their regular rate or 2/3 the applicable minimum wage, whichever is higher, up to $200 per day and $2,000 in the aggregate (over a 2-week period).
For leave reason (5); employees taking leave shall be paid at 2/3 their regular pay or 2/3 the applicable minimum wage, whichever is higher, up to $200 per day and $12,000 in the aggregate (over a 12-week period- two weeks of paid sick leave followed by up to 10 weeks of paid expanded family and medical leave). The first 10 days of leave are unpaid. After 10 days the Employer “shall provide paid leave for each day of leave taken after the 10 day unpaid period. The employee may then take 12 weeks of paid leave at 2/3 of the regular rate of pay not to exceed 200 per day or 10k in the aggregate.
GETTING IT BACK
The Employer receives a Tax credit against payroll taxes for each calendar quarter up to an amount equal to 100 percent of the qualified sick leave wages paid by such employer with respect to such calendar quarter. Should the payroll tax amount paid the employer on a quarterly basis not be sufficient to cover the amount paid under the act, the Employer treats the amounts paid as not covered by payroll taxes as a credit against estimated income taxes on taxes. Of course, this does not deal with the fact that there may be extensive losses due to the Virus outbreak. This entire provision sunsets on December 31, 2020.
February 21, 2020
Commercial Law League of America Advocates For Passage of The Bankruptcy Venue Reform Act of 2019 (H.R. 4421)
Rolling Meadows, IL – February 21, 2020 –On February 20, 2020, the National Association of Attorneys’ General (NAAG) announced its official support for passage of The Bankruptcy Venue Reform Act of 2019, pending in Congress as H.R. 4421. https://www.congress.gov/bill/116th-congress/house-bill/4421
Forty-Two (42) attorneys’ general signed a letter asking Congress to pass H.R. 4421 because:
“As state attorneys general, we are charged with guarding our states’ financial interests, enforcing consumer protection laws, protecting our citizens from environmental contamination, and combating wrongdoing in whatever form it takes. These duties are difficult enough to carry out when corporations file bankruptcy and claim to be financially unable to comply with their legal obligations. The difficulties are multiplied when bankruptcy law allows those debtors to seek relief in distant jurisdictions where the debtors have found rulings that are friendlier to their interests than to those of persons and agencies located far away who will have difficulty affording to appear and be heard.”
The NAAG’s press release and the letter from the 42 state attorneys’ general are available here: https://www.naag.org/naag/media/naag-news/attorneys-general-support-bankruptcy-venue-reform-act-of-2019.php; https://www.naag.org/assets/redesign/files/sign-on-letter/NAAG%20Support%20Letter%20-%20HR%204421.pdf.
The Commercial Law League of America has consistently advocated for bankruptcy venue reform and is the nation’s leading organization on this issue. On February 24, 2020, the CLLA and its members will be in DC on the Hill advocating for Congress to pass H.R. 4421. They will also be seeking corrective changes to recently enacted Small Business Bill (28 USC Section 1409(b)) relating to the jurisdictional provision for preferences, and opening discussions on discharging student loans utilizing the CLLA’s proposal to amend the statute to define hardship using the criteria from other statutes. To learn more about the CLLA’s 7th Annual Capitol Hill Day, please see here https://clla.org/wp-content/uploads/2020/2020HillDay/2020-Hill-Day-Web.pdf.
Join the CLLA by becoming a member here: https://clla.org/become-a-clla-member/.
February 20, 2020
Commercial Law League of America Announces 2020 President’s Cup Recipient
Rolling Meadows, IL – February 20, 2020 – The Commercial Law League of America, has named B. Emory Potter, Partner, Hays, Potter & Martin, LLP, as the 2020 President’s Cup award recipient. Emory Potter is a construction, commercial and civil litigation attorney with extensive trial experience.
His specialties include material man’s lien practice, bond work related to construction, creditors’ rights, and commercial collections, handling a large volume of litigation from initiation of suit through post-judgment collection. He has worked on all aspects of lien law, state bond claims, and Miller Act claims. Since 2009, Mr. Potter has acted as a Special Master for the Superior Court of Fulton County where he is asked to assist the Court with property disputes, quiet title actions, and other matters that the Court deems warrant special attention. READ MORE
January 29, 2020
Commercial Law League of America Announces Three Additional Certified Agencies
Rolling Meadows, IL – January 29, 2020 –The Commercial Law League of America (CLLA) is pleased to welcome into the esteemed group of Certified Agencies, Convergent Commercial Inc., White Plains, NY; Greenberg, Grant & Richards, Inc., Houston, TX; and Windham Professionals, Inc., Salem, NH. These organizations demonstrate that their agency adheres to relevant regulations in the collection of commercial debt, use generally accepted accounting practices and follow standards to protect and safeguard their clients’ funds. They join other commercial collection agencies around the country in proudly displaying the Certified Commercial Collection Agency Seal. READ MORE
January 28, 2020
Commercial Law League to Host 7th Annual Capitol Hill Day in Washington, D.C.
Rolling Meadows, IL – January 28, 2020 –The Commercial Law League of America will be conducting its seventh legislative event in Washington D.C. on February 24, 2020. CLLA held its first D.C. Legislative Day in February of 2014 and has since found success in building relationships with legislators and regulators and in forming relationships with other likeminded organizations. READ MORE