Friday, April 24, 2009

Bankruptcy Cramdown Headed for Senate Vote Next Week, Likely to Defeat?

By Andrew Toth-Fejel, Bankruptcy Litigation Support for Attorneys,

The Associated Press and Reuters are both reporting as of late afternoon today that Senate Majority Leader Harry Reid has announced that the bankruptcy mortgage cramdown bill is heading for a vote on the Senate floor likely either Wednesday or Thursday of this coming week. The Associated Press story is further stating that the bill is "headed for defeat." The AP story does not state specifically the basis for this prediction, except to cite the statements of two Democratic Senators who are saying they intend to vote against the legislation, Jon Tester of Montana and Ben Nelson of Nebraska.

Throughout this week there have been indications of the intense ongoing negotiations coordinated mostly through Senator Dick Durbin's office, in which he sought creditor industry support primarily from some of the largest banks and from credit union organizations. The goal had been to have a deal in place as a way of persuading all or virtually all Democratic Senators to get behind the bill, along with a handful of Republicans, to reach the filibuster-proof 60 votes. There has been no announcement of such a deal.

Instead the consistent story of the week has been the lack of progress in the negotiations, punctuated by a midweek story that received a great deal of publicity, a statement by the National Association of Federal Credit Unions that it could not support the legislation in the form being negotiated. This produced a public retort by the much larger Credit Union National Association, with its president chiding the rival trade group for no longer participating in the negotiations.

Treasury Secretary Timothy Geithner did not help the cause earlier in the week with his less than enthusiastic endorsement of the legislation: "We are supportive of carefully designed changes” to bankruptcy law, Geithner said. “It’s a difficult balance to get right, as you know,” he continued. “But the president is supportive of this.” He was responding to a question from Elizabeth Warren, chairwoman of the congressional oversight panel on the financial bailout, a friendly audience since she has been a long-time supporter of the bankruptcy mortgage cramdown option.

Please return to this website for developments throughout this upcoming week as the anticipated Senate floor vote approaches.

A new Bulletin on this website will provide an update of this legislation as soon as there is new information to report. PLEASE EMAIL ME at IF YOU WOULD LIKE TO BE EMAILED A LINK TO IT AS SOON AS IT IS UPLOADED onto this website.

by Andrew Toth-Fejel
Bankruptcy Litigation Support for Attorneys
PLEASE NOTE that this Bulletin and the entire contents of this website are NOT designed for the general public but rather only for attorneys. The writer is not licensed to practice law in any state. This means that he is not legally permitted to give any legal advice or perform any legal services. Any non-attorney reading this must consult an attorney about ANYTHING contained here. Nothing in this website is intended to be nor should be read as being legal advice to anyone.

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