Patrick Leahy: “last Thursday Senate and House conferees reached final agreement on the Conference Report for H.R. 333, the Bankruptcy…”

“last Thursday Senate and House conferees reached final agreement on the Conference Report for H.R. 333, the Bankruptcy Abuse Prevention and Consumer Protection Act of 2002. I look forward to Senate consideration of this measure in September, following House action on the conference report. It seems inevitable in a bill nearly five hundred pages in length, even with our most diligent efforts, that the conferees sometimes fail to catch all drafting errors. Shortly after the conference was concluded, it was brought to our attention that the effective date provision of Section 1234 contained an error. Section 1234 is not a new provision of law but a reiteration of current law, which Senator Baucus offered as a amendment to the Senate-passed bill. The House and Senate conferees agree to retain the provision during our conference. This section makes clear that a claim that is in bona fide dispute over the existence of liability, or the amount of that liability, cannot be used as a weapon for bringing an involuntary bankruptcy action. This clarification is consistent with the 1984 legislative history of this portion of Section 303 of the Bankruptcy Code. It also tracks the decisions of all five Courts of Appeals that have ruled on the bona fide dispute bar to the bringing of involuntary bankruptcy actions.”