New Bankruptcy Judgeship Bill Passes U.S. House

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By Daniel Gill

The U.S. House of Representatives approved a bill designed to shore up the bankruptcy courts, just a week before 29 temporary bankruptcy judgeships are set to lapse.

The Bankruptcy Judgeship Act of 2017 ( HR 2266) passed by a voice vote under a suspension of the rules, a procedure requiring a two-thirds vote for passage and which prohibits floor amendments.

Two of the measure’s four co-sponsors spoke from the House floor, championing the bill as a bipartisan effort to protect the bankruptcy courts, a foundation to our nation’s economy, according to Rep. Bob Goodlatte (R-Va.), Chairman of the House Judiciary Committee.

There are currently 29 temporary bankruptcy judgeships set to expire May 25, Goodlatte said. The 29 positions represent more than 8 percent of the nation’s current bankruptcy judges, he said.

The measure would make 14 of those temporary positions permanent and would provide for another four new bankruptcy judgeships.

Unlike other federal judgeships, including district, circuit and U.S. Supreme Court judges or justices, bankruptcy judges are governed by Article I of the Constitution, aren’t appointed by the president and serve 14 year terms.

The judgeships created by the bill would not require funding by taxpayers, Goodlatte stressed.

Nor would they be funded by small business or consumer debtors, Rep. John Conyers (D-Mich.), ranking member of the committee, said. Instead, the positions will be funded by quarterly fees assessed against large Chapter 11 debtors—those that have quarterly disbursements of at least $1 million. And those fees won’t be assessed unless the U.S. Trustee’s System Fund dips below $200 million.

The judgeships are to be for districts identified by the Judicial Conference of the United States, using a comprehensive weighting system to measure court workloads. Those districts include the districts of Delaware, Maryland, Nevada and Puerto Rico, the Southern District of Florida, the Eastern District of Michigan, the Eastern District of North Carolina and the Eastern District of Virginia.

No new bankruptcy judge positions have been established since 1992, Goodlatte noted.

Goodlatte, Conyers and Rep. Lisa Blunt Rochester (D-Del.) each emphasized the bipartisan support of the bill.

The bill’s other sponsors are Rep. Tom Marino (R-Pa.), Chairman of the Regulatory Reform, Commercial and Antitrust Law Subcommittee; and Subcommittee Ranking Member David Cicillini (D-R.I.).

To contact the reporter on this story: Daniel Gill in Washington at dgill@bna.com

To contact the editor responsible for this story: Jay Horowitz at JHorowitz@bna.com

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