CLLA members blanketed Capital Hill on February 27, 2017 to pursue their legislative agenda with House and Senate staffers. Members hailed from states across the country, including California, Georgia, Iowa, Massachusetts, Michigan, Ohio and Texas. The league advanced proposals to reform the bankruptcy venue and preference law. Links to the league's legislative positions can be found here and here.
On venue, the CLLA would like to eliminate state of incorporation venue and limit affiliate filing to cases where lower tier entities file with parent company instead of allowing the venue for one minor subsidiary to set venue for the entire group of companies.
The CLLA offered a package of three preference reforms: requiring a meet and confer before filing suit, requiring that cases under $50,000 be filed in the defendant's forum and allowing payments under settlement agreements to fall within the ordinary course of business defense.
Joe Peiffer from Cedar Rapids, Iowa filed a video showing the effect of a Delaware bankruptcy filing on an Iowa corn farmer. The video, which is well worth watching, can be found here. According to Joe:
Hill Day was an interesting day for CLLA as it provided us with an opportunity to meet with our senators and representatives to promote the cause of bankruptcy venue reform. The face of the argument was changed dramatically by a video of a family farmer explaining the difficulties that were encountered by Midwestern Farmers when the VeraSun Energy Chapter 11 was filed in Delaware. Attitudes of staffers appeared to change as they viewed an Iowa farmer explaining the problems in seeking to obtain justice in Wilmington, DE, over 1,100 miles away from the corporate headquarters in Sioux Falls, SD.
Peter Califano of San Francisco, California is a long-time venue warrior, having testified before Congress in 2011. Peter commented:
Going to Washington DC is always a special trip for me. It evokes memories -- beginning with appearing before the school board in grade school, mentored and encouraged by Mr. Kemmer, my 6th grade sociology teacher, who challenged us to initiate change, make things better and not accept a mediocre status quo. Our Hill Day effort on bankruptcy venue reform is all of that, and more – it’s also making sure that an essential part of our country’s economy – bankruptcy, functions as intended, and for all involved parties.
Each year that we appear to advocate on this issue, the staffers we meet seem more and more receptive and supportive of the proposed reform. And each year our team better captures the essential reasons for a change in the law. Clearly our issue was advanced during our Hill Day. All the meetings I participated in, I did not encounter one substantive pushback for allowing for the continuation of the current broken venue system. All of our discussions were focused on how to get it done. I am especially appreciate the input and wisdom of our lobbyist, Dave Goch, who come to think about it may be related to Mr. Kemmer.
I enjoyed meeting with staffers from my Representative, both Senators and House and Senate Judiciary Committees. Although they seemed very young, they were also well-informed and engaged. For me, the big take-away was using social media to talk about our positions. When I tweeted about meeting with my Representative, I got a like back from his office. I also got a call from a Wall Street Journal reporter who was interested to hear about the League and its positions.
Reuel Ash of Cincinnatti, Ohio described his experiences this way:
This was my first Hill Day for the CLLA, and I enjoyed it. Since I live in Cincinnati, I met with staffers from both senators from Ohio (Sens. Sherrod Brown and Rob Portman) and both House Representative members from Cincinnati’s districts (Reps. Steve Chabot and Brad Wenstrup). I met with a staffer from California Senator Feinstein’s office as well. I was on the team seeking changes in the preference statute, which is not as sexy as venue or CFPB reform, but still very important to our vendor and general business clients in Ohio and throughout the region. The preference team’s objective, without getting into the weeds, is to even the playing field for preference defendants, especially those who get sued in the mega-cases. The staffers from Senator Feinstein and Portman’s offices were especially knowledgeable and appeared interesting in helping us achieve our goals. I suspect there’s a good chance that we might get at least some of our wish list on a legislative bill within the next couple of years. As to general impressions: It was exciting to be on Capitol Hill and be in the middle of all of the political activity. The Senate buildings and House buildings are inter-connected by basement tunnels, so one can walk from one Senate building to another across the street (and same with the House) without going outside. There is a whole other world in the tunnels—I saw a barber shop, newsstand, and a great buffet cafeteria among other treasures. It was also good to get to reinforce relationships with CLLA colleagues and forge new ones. I encourage all CLLA attorney members to participate in the next Hill Day.