Description: TO PASS H.R. 10624, REVISING CHAPTER 9 OF THE BANKRUPTCY ACT, RELATING TO POLITICAL SUBDIVISIONS.
Bill summary: (Conference report filed in House, H. Rept. 94-938)
Grants a court of bankruptcy, under chapter IX of the Bankruptcy Act, authority to exercise exclusive original jurisdiction for adjusting the debts of political subdivisions and public agencies and instrumentalities.
States that the court may permit such petitioner to reject executory contracts and unexpired leases. Stipulates that unless the petitioner consents or the bankruptcy plan so provides, the court shall not, by any order, decree, or
otherwise, interfere with: (1) any of the political or governmental powers of the petitioner, (2) any of the property or revenues of the petitioner, or (3) the petitioner's use of enjoyment of any income-producing property.
Provides that upon the filing of a petition the chief judge of the court in the district in which the petition is filed shall immediately notify the chief judge of the circuit court of appeals of the circuit in which the district court is located, who shall designate the judge of the district court to conduct the proceedings under the Bankruptcy Act.
Reserves to the various States power to control any municipality or politcal subdivision of or in such State in the exercise of its political or governmental powers, including expenditures therefor.
Stipulates that any States' political subdivision or public agency or instrumentality is eligible for relief if it is insolvent or unable to meet its debts as they mature, and desires to effect a plan to adjust its debts.
Makes such entities ineligible unless they have successfully negotiated a plan of adjustment of their debts with creditors holding at least a majority in amount of claims.
Sets forth judicial procedures governing the filing of the petition, proceedings, venue, fees, and notice.
Permits the court to dismiss such a petition which is not filed in good faith or which does not meet the requirements of this chapter. States that a petition filed pursuant to this Act shall operate as a stay of the commencement or the continuation of a judicial or other proceeding against the petitioners.
Stipulates that a provision in a contract or lease which permits modification thereof because of the insolvency of the petitioner is not enforceable if any defaults in prior performance of the petitioner are cured and adequate assurance of future performance is provided.
States that any set-off which relates to a contract, debt, or obligation of the petitioner and which was effected within four months prior to the filing of the petition, is voidable and recoverable by the petitioner after hearing on notice.
Authorizes the Court to refer any special fact to a referee in bankruptcy for consideration if the court finds that the condition of its docket is such that it cannot take testimony without unduly delaying the dispatch of other business pending in the court.
Permits reimbursement for expenses incurred in connection with the case.
Sets forth priorities for payment in advance prior to the payment of any distribution to creditors under a plan. Directs the petitioner to file a plan for the adjustment of debts. States that such plan may be confirmed only if it has been accepted in writing by or on behalf of creditors holding at least two-thirds in amount and not less than 50 percent in number of the claims of each class. Permits any creditor or a special taxpayer affected by the plan or the Securities and Exchange Commission to file a complaint with the court objecting to the confirmation of the plan.
Requires the court to hold a hearing thereafter on the confirmation or modification of the plan, and to permit a labor union that represents employees of the petitioner to be heard on the economic soundness of the plan affecting the interests of such employees.
States that the court shall confirm the plan if satisfied that the plan is fair, does not discriminate unfairly against any creditors, and meets other specified criteria.
Discharges the petitioner from all claims against it provided for in the plan at the time of confirmation.
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Bill titles: An Act to amend chapter IX of the Bankruptcy Act to provide by voluntary reorganization procedures for the adjustment of the debts of municipalities.; A bill to revise chapter IX of the Bankruptcy Act.
Original source documents: Digest of the Congressional Record vol. 121-181, p. H12092;
Links for more info on the vote: congress.gov