House Judiciary Subcommittee Holds Hearing on "Financial Institution Bankruptcy Act of 2015" (with Lofchie Comment)

The House Judiciary Subcommittee on Regulatory Reform, Commercial and Antitrust Law held a hearing on "H.R. 2947, the "Financial Institution Bankruptcy Act of 2015."

The bill, which is sponsored by Representative Dave Trott (R-MI) would, among other things, create a new Subchapter V of Chapter 11 of the Bankruptcy Code to facilitate the liquidation, reorganization or recapitalization of a "covered financial corporation." Additionally, the bill would suspend customer early termination rights for qualified contracts.

The following witnesses testified:

• Mr. Donald S. Bernstein Esq., Partner, Davis Polk Wardwell LLP (written testimony);
• Mr. Stephen E. Hessler Esq., Partner, Kirkland Ellis LLP (written testimony); and
• Mr. Richard Levin Esq., Partner, Jenner Block LL (written testimony).

Lofchie Comment: All three witnesses were in favor of significant aspects of the legislation, including a two-day delay in the right of counterparties to terminate qualified contracts.

See: Webcast of Hearing; Chairman Goodlatte Opening Remarks; Text of Financial Institution Bankruptcy Act of 2015.