H.R. 764 Bankruptcy Amendments of 1997
Technical Corrections Bill Advances in House
Editor's Note: The electronic version of the bill at Thomas will not reflect the changes described below for 2-3 days.
On June 25, 1997, the House Subcommittee on Commercial and Administrative Law unanimously approved an amendment in the nature of a substitute bill to H.R. 764 by Rep. George Gekas (R-PA), the Chairman of the Subcommittee.
While much of the bill's provisions are of a technical nature, there are several substantive law changes. Questions were raised about several provisions in H.R. 764 as introduced, and the new version seeks to address these concerns.
The new bill would raise the cap on the special treatment for single asset real estate bankruptcies from the current $4 million to $15 million. The version of H.R. 764 as introduced removed the cap entirely.
The new bill also seeks to clarify the provision on curing
non-monetary defaults of leases of real property, or defaults of
non-monetary provisions in executory contracts, in the wake of
the 9th Circuit's Claremont opinion. The bill would
strike current §365(b)(1)(D) and replace it with three
subsections, (D), (E) and (F), as follows:
"(D) the satisfaction of any penalty rate or penalty provision relating to a default arising from a failure to perform nonmonetary obligations under an executory contract or under an unexpired lease of real or personal property;
"(E) the satisfaction of any provision (other than a penalty rate or penalty provision) relating to a default arising from any failure to perform nonmonetary obligations under an unexpired lease of real property, if it is impossible for the trustee to cure such default by performing nonmonetary acts at and after the time of assumption; or
"(F) the satisfaction of any provision (other than a penalty rate or penalty provision) relating to a default arising from any failure to perform nonmonetary obligations under an executory contract, if it is impossible for the trustee to cure such default by performing nonmonetary acts at and after the time of assumption and if the court determines, based on the equities of the case, that paragraph (1) should not apply with respect to such default."
Among its other provisions, the substitute seeks to address the so-called McConville problem by making clear that post-petition transfers immune from attack under sections 544 and 549 of the Code would not be void or voidable as made in violation of the automatic stay, and makes a further clarification to the "Deprizio" amendment in the 1994 Reform Act.
The bill adds "watercraft" and "aircraft" to the motor vehicles in §523, making losses arising from the operation of these while intoxicated nondischargeable.
The changes made by the bill would apply only to cases commenced on or after the date of enactment of the Act.