Bill on Bankruptcy: Detroit Shows Need for Amending Bankruptcy Law
Oct. 24 (Bloomberg) — Detroit’s municipal bankruptcy is reason Congress should consider amending Chapter 9 governing municipal debt adjustment, as Bloomberg Law’s Lee Pacchia and Bloomberg News bankruptcy columnist Bill Rochelle discuss on their video. Although the bankruptcy court for constitutional reasons needs to rule on whether a municipality qualifies for bankruptcy, the law could be changed so creditors who oppose and lose end up paying the city’s legal bills.
The bankruptcy of Houston Regional Sports Network LP might end up being as entertaining as the reorganization of the Los Angeles Dodgers, because the case involves a clash among owners Comcast Corp., the Houston Astros baseball team, the Houston Rockets of the National Basketball Association. The judge is Marvin Isgur from Houston, who enjoys resolving complex cases.
The video concludes with discussion of two important court opinions this month. The U.S. Court of Appeals in Philadelphia added to an existing conflict of circuits by ruling that the Bankruptcy Code doesn’t automatically preempt federal the Fair Debt Collection Practices Act.
The Fifth Circuit in New Orleans handed down an opinion on judicial estoppel that might morph into authority changing the law and making trustees no longer subject to the in pari delicto defense, which has severely limited how much the trustee for Bernard L. Madoff Investment Securities Inc. can recover from people who aided the fraud.