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Non-Tech : The Enron Scandal - Unmoderated -- Ignore unavailable to you. Want to Upgrade?

To: H James Morris who wrote (2037)	4/23/2002 11:39:42 PM
From: stockman_scott	Read Replies (3) \| Respond to of 3602

Enron Debacle Spurs Bankruptcy Compromise Apr 23 2002 8:35PM WASHINGTON (Reuters) - An overhaul of the nation's bankruptcy law moved closer to passage on Tuesday as concern over Enron executives shielding their wealth in luxury homes helped resolve a key disagreement between lawmakers. The extent to which a debtor's home is shielded from creditors had been a major obstacle to reconciling House and Senate versions of legislation that would make it harder for people in financial straits to walk away from their debts. But the possibility that executives of failed energy trader Enron Corp. might take advantage of exemptions under state homestead laws untied the knot. "The Enron collapse raises new concerns," said Wisconsin Democratic Sen. Herbert Kohl. Some states, including Florida and Texas, have unlimited homestead exemptions. Under the agreement, homestead exemptions would be limited to $125,000 where debts arise from a crime or misdeed or when the debtor has resided in the dwelling less than 40 months. "The pressures of Enron forced a compromise on the homestead provision because it was no longer politically possible to have that sort of a benefit," said Ken Guenther, president of the Independent Community Bankers Association. Former Enron Chairman Kenneth Lay has sold an Aspen, Colorado house for $10 million. His wife Linda has said the family will sell all their real estate interest outside of Texas because of financial difficulties but will keep their home in Houston, a $7 million high-rise apartment. Lawmakers left for later debate over another contentious issue: whether people convicted of violence against abortion clinics can use bankruptcy to avoid paying court judgements against them. But members of Congress and banking industry representatives said coming to terms on home protections suggests the final obstacle is surmountable. "This compromise is a significant step forward," Kohl said at a meeting of the House and Senate negotiators. "Clinic violence should not be as big an obstacle if there is good will on both sides," Guenther said. The bankruptcy measure would be the most sweeping overhaul of U.S. bankruptcy laws in almost a quarter century. Congress has been wrestling with the legislation since 1997. The measure is strongly supported by U.S. banks, retailers, credit card companies and auto lenders, who argue the system is being abused by people who can afford to pay back some of their debts. Opponents, including academics, labor unions and consumer groups, say lenders should shoulder some of the blame for fostering bankruptcies through lax lending standards. While both houses of Congress passed different versions of bankruptcy changes in March 2001, the U.S. economic slump that began that month undermined support for the measure among Democrats, who said the timing was poor to crack down on people whose financial troubles may have been caused by the downturn. "It is ridiculous to reopen loopholes for wealthy deadbeats at the same time making the bill harsher for middle class debtors who most often file through no fault of their own," Minnesota Democratic Sen. Paul Wellstone said in a statement. 04/23/02 20:33 ET