Judicial Security Bill Advances to Senate Floor

Judicial Security Bill Advances to Senate Floor

December 2, 2021

ABI Bankruptcy Brief

Judicial Security Bill Advances to Senate Floor​​​​​​

A bill to protect federal judges and their families from threats and attacks has advanced to the full Senate, and a U.S. district judge from New Jersey, whose son was slain by an angry litigant, urged Congress to pass the legislation without delay, according to a U.S. Courts press release. The Daniel Anderl Judicial Security and Privacy Act, named for the late son of Judge Esther Salas, was voted out of the Senate Judiciary Committee earlier today by a 22-0 vote with one senator voting present. Daniel Anderl was fatally shot in July 2020, and Salas’s husband Mark Anderl was gravely wounded, when a disgruntled litigant came to the family’s door posing as a deliveryman. The gunman found the judge’s personal information on the internet. Daniel, a student at Catholic University in Washington, D.C., had just turned 20. The bipartisan bill would protect judges’ personally identifiable information from resale by data brokers. It would also allow federal judges to redact personal information displayed on federal government internet sites and prevent publication of personal information by other businesses and individuals where there is no legitimate news media or other public interest.​​

Click here to read the full bill text.

Analysis: Twenty Years After Enron, Investors Are Still Vulnerable to Fraud​​​​​​

The collapse of Enron, which filed for bankruptcy protection 20 years ago today, shook the capital markets and led directly to the demise of Arthur Andersen, the auditing firm that approved Enron’s annual statements and accounting acrobatics. The scandals led to new rules and laws for corporations and auditors that were meant to prevent future frauds of such massive scale. Two decades later, no similar blowups have occurred in U.S. markets, but it’s not clear that investors are any safer today than they were before Enron Corp. failed, according to an analysis in Bloomberg Businessweek. At the time of the Enron fiasco, Andersen had already been enmeshed in frauds at Waste Management Inc., Sunbeam Products Inc. and the Baptist Foundation of Arizona. Soon an even bigger fraud would emerge at WorldCom, another Andersen client. In the wake of the Waste Management collapse, the U.S. Securities and Exchange Commission hit Andersen with a $7 million fine, sanctioned four partners, and issued an injunction against any further violations of securities laws. Once the Enron fraud began to emerge, Andersen’s Houston office quickly activated its “document retention policy,” shredding Enron work papers in advance of an SEC inquiry. As public outrage grew, the Justice Department charged the firm with obstruction. In settlement talks, prosecutors insisted that Andersen admit to some form of wrongdoing. Andersen’s management refused, maintaining that the firm had not broken any laws. A Houston jury convicted Andersen in 2002, effectively putting it out of business. The 2002 Sarbanes-Oxley Act, a wide-ranging law to strengthen auditors’ oversight, added to the pressure on corporations to avoid reporting dodgy numbers. For a few years, the specter of Andersen’s fate injected a rigor into its peers’ audits that had previously been absent. Earnings restatements rose in 2003, 2004, and 2005, a sign that the act’s accounting reforms, coupled with emboldened auditors, were curing corporations of bad practices. But in 2005 the Supreme Court reversed Andersen’s conviction, which had essentially shut down a global firm with 85,000 employees. From 2005 onward, it was clear that the government would be wary of any prosecution that could further reduce the ranks of the Big Four: Deloitte, Ernst & Young, KPMG, and PwC, according to the analysis.​​

Can’t Travel to WLC? Attend Online to Catch All of the Engaging Programming!​​​​​​

You will not want to miss insights from some of the country’s top insolvency and restructuring experts on issues confronting the profession in 2022 at ABI’s 2021 Winter Leadership Conference, taking place Dec. 9-11. Click below to watch a promo!

Now offering a virtual attendance option, the conference will feature 24 concurrent sessions addressing a diverse spectrum of key insolvency topics for both business and consumer practitioners, including a 2022 economic outlook, mass tort chapter 11 cases, the future of the SBRA, real estate restructurings and more. Register today to attend via an engaging virtual portal to grow your knowledge and network!

Jobless Claims Remain Near Pandemic Low but Grow as More Americans Apply for Unemployment​​​​​​

The number of Americans applying for unemployment benefits rose last week, even though the U.S. job market has been rebounding from last year's coronavirus recession, the Associated Press reported. Jobless claims climbed by 28,000 to 222,000 from the previous week's 52-year low of 194,000, the Labor Department reported Thursday. The four-week average of claims, which smooths out week-to-week ups and downs, fell below 239,000, a pandemic low. Since topping 900,000 in early January, the weekly applications — a proxy for layoffs — have been falling more or less steadily. Overall, 2 million Americans were receiving traditional jobless benefits the week that ended Nov. 20, down by 107,000 from the week before. Until Sept. 6, the federal government had supplemented state unemployment insurance programs by paying an extra payment of $300 a week and extending benefits to gig workers and to those who were out of work for six months or more. Including the federal programs, the number of Americans receiving some form of jobless aid peaked at more than 33 million in June 2020. ​​

Some Professional Degrees Leave Students with High Debt but Without High Salaries​​​​​​

Professional degrees like dentistry and veterinary medicine are leaving many students with immense college debt, threatening the outlook for fields that provide essential public services, according to a Wall Street Journal analysis of federal data. The culprits span graduate programs at big state schools, for-profit colleges and some of the U.S.’s elite private universities. In addition to programs for veterinarians and dentists, chiropractic medicine, physical therapy and optometry produced graduates with some of the worst combinations of high debt and modest beginning paychecks, according to newly released data from the U.S. Department of Education. Students pursuing professional programs can take out loans to cover all their school costs and living expenses under a federal loan program called Grad Plus. (Subscription required.)​​

Poll: Nearly Half of Americans Are Experiencing Financial Hardship Due to Inflation​​​​​​

Nearly half of Americans in a new Gallup poll reported that recent price increases are causing their family some degree of financial hardship, with 10 percent describing the hardship as severe, The Hill reported. Overall, 45 percent of respondents said that they are facing financial hardships related to increased prices. Gallup said lower-income households are likely to have been hit especially hard by the recent price increases, with 71 percent of households making less than $40,000 a year saying inflation has caused hardship. Twenty-eight percent of this group described the hardship they are experiencing as severe, saying it affects their ability to maintain their current standard of living. In contrast, only 47 percent of middle-income households and 29 percent in upper-income households report that inflation has caused hardship. Americans who received less education are also reporting financial hardship following price increases. Just under 55 percent of U.S. adults without a college degree say inflation has caused financial hardship, with 30 percent of those with a college degree saying the same.​​

COVID Is Set to Cost the Tourism Industry $1.6 Trillion This Year. Omicron Could Make It Worse.​​​​​​

The return of stricter COVID restrictions to fight the latest variant, omicron, has already left some travelers stranded. For many tourism businesses, it’s also threatening hopes of an upcoming holiday boost this year — especially after last year’s shutdowns emptied out popular destinations, from the Colosseum in Rome to the resort island of Bali, the Washington Post reported. “There was a kind of sunrise on the horizon” earlier this year, said Tobias Warnecke, the German hotel association’s economic adviser. Now, thanks to infections and rule changes roaring back, and fears over omicron, “we have a lot of cancellations, and we’re on our way down.” With scientists rushing to better understand the variant and its high number of mutations, governments including in the U.S. have started tightening masking, quarantine and travel rules. Many have closed their borders to the southern region of Africa where scientists first detected the variant, though it has since popped up in the U.S. and more than a dozen countries from Canada to Japan. The timing also has the aviation industry worried. The president of Emirates airline has noted that a hit to the peak travel season in December could cause “significant traumas in the business,” which had been seeing a recovery.​​

Amendments to the Federal Rules of Bankruptcy Procedure Took Effect Yesterday​​​​​​

Four bankruptcy rule amendments took effect yesterday, as summarized by Robert Eisenach on JD Supra. They are all relatively minor technical or administrative revisions. Amendments include:

• Rule 2005, addressing release conditions for a debtor taken into custody, was amended to refer to the correct section of Title 18.

• Rule 3007, governing the servicing of claim objections, was amended to make clear that an insured depository institution, now identified only as one “defined in section 3 of the Federal Deposit Insurance Act,” also has to be served pursuant to Rule 7004(h) and its more rigorous service requirements (including certified mail in some situations).

• Rule 7007.1, involving corporate ownership disclosures, was amended to align with similar disclosure rules in the Federal Rules of Appellate Procedure and the Federal Rules of Civil Procedure. It has been revised to apply only to nongovernmental corporations, including when such corporations intervene in bankruptcy cases and adversary proceedings.

• Rule 9036, governing notice and service, was amended to address high-volume paper-notice recipients and to specify procedures for such recipients related to the Bankruptcy Noticing Center (BNC).

• Although not a Bankruptcy Rule, Federal Rule of Appellate Procedure 6, which governs bankruptcy appeals, was also revised slightly but only to change the reference to a form given the amendments made to Federal Rule of Appellate Procedure Rule 3 (which, in turn, split former Form 1 into Form 1A and Form 1B).

Click here for the full set of rule changes.

The rule changes are also detailed in an article in the December 2021 ABI Journal by Una M. O’Boyle, who is the clerk of the U.S. Bankruptcy Court for the District of Delaware and the former chief deputy of the U.S. Bankruptcy Court for the Southern District of New York. Click here to read the article. ​​ ​​

Sign up Today to Receive Rochelle’s Daily Wire by E-mail!
Have you signed up for Rochelle’s Daily Wire in the ABI Newsroom? Receive Bill Rochelle’s exclusive perspectives and analyses of important case decisions via e-mail!

Tap into Rochelle’s Daily Wire via the ABI Newsroom and Twitter!


New on ABI’s Bankruptcy Blog Exchange: SEC Chief Says Cryptoexchanges Need Regulatory Oversight

Securities and Exchange Commission Chair Gary Gensler yesterday doubled down on his calls for more oversight of cryptocurrency trading platforms, offering new insight into his priorities as he seeks to crack down on the digital coin industry, according to a recent blog post.

To read more on this blog and all others on the ABI Blog Exchange, please click here.

© 2021 American Bankruptcy Institute
All Rights Reserved.
66 Canal Center Plaza, Suite 600
Alexandria, VA 22314