WASHINGTON – The Senate averted a crisis in America’s bankruptcy courts system Thursday evening by unanimously passing the bipartisan Temporary Bankruptcy Judgeship Extension Act introduced by U.S. Senator Chris Coons (D-Del.). The legislation will extend the authorizations of 29 temporary bankruptcy judgeships in 14 states and Puerto Rico — including five judgeships in Delaware — to ensure that the judgeships are not lost due to the retirement, resignation, death or removal of the judge. Without an active Congressional authorization, a replacement could not be appointed. A 30th temporary bankruptcy judgeship covered by the bill, which now awaits passage in the House, was vacated after the bill’s introduction and can now not be filled.
More than one-third of the nation’s largest bankruptcies are handled by Delaware’s bankruptcy judges, which are hailed for their experience, speed and predictability. Five of Delaware’s six judgeships have temporary authorizations that have expired. One additional Wilmington-based bankruptcy court is on loan from the eastern district of Pennsylvania, and also has a temporary authorization that has expired.
“Having a full bench of bankruptcy court judges will allow for a renewed economic stability for many who have fallen into financial hardships,” Senator Coons said. “Talented bankruptcy judges can help turn a likely economic loss into a successful reorganization that protects jobs and creditors. This legislation will ensure that these judgeships remain in place and continue to fairly and expeditiously resolve bankruptcy claims — a key component of our economy as companies and individuals get back on their feet. I applaud the work of my colleagues from both sides of the aisle in joining together to pass the Temporary Bankruptcy Judgeships Extension Act.”
Faced with increasing demand on the federal court system, Congress has created dozens of temporary bankruptcy judgeships over the last 20 years to help the courts keep pace. The Temporary Bankruptcy Judgeships Extension Act of 2011 heeds the recommendations made last year by the non-partisan Judicial Conference of the United States, whose biennial review urged Congress to prevent the expiration of the 30 temporary bankruptcy judgeships covered by this bill by extending each by five years. The statutory authorization to fill these judgeships, should they be vacated — as happened when Judge Arthur Gonzalez of the Southern District of New York retired this winter — has already lapsed, preventing Congress and the President from appointing a replacement.
The Temporary Bankruptcy Judgeship Extension Act of 2011 was introduced in the Senate in November and passed out of the Senate Judiciary Committee in December. The House of Representatives passed the legislation on December 8. Amended in the Senate Thursday night, the House will have to vote on the legislation again. It is expected to pass.
“I’m grateful to my colleagues in the Senate for coming together in bipartisan way to move this legislation forward,” Senator Coons said. “No one wants to see companies file for bankruptcy, but when they do, it’s important their cases are handled professionally and by a court that isn’t so overloaded with cases that it can’t give them the attention they need. These courts protect American jobs every day. This legislation will help ensure they can continue to do so as our economic recovery grows.”
Nineteen districts in 14 states, plus Puerto Rico, currently have temporary judgeships that would be extended by this bill, including:
The bill is co-sponsored by Senators Richard Burr (R-N.C.), Lindsay Graham (R-S.C.), Tom Carper (D-Del.), Kay Hagan (D-N.C.), Lamar Alexander (R-Tenn.), Dianne Feinstein (D-Calif.), Kirsten Gillibrand (D-N.Y.), Johnny Isakson (R-Ga.), Bill Nelson (D-Fla.), Dean Heller (R-Nev.), Chuck Schumer (D-N.Y.), Bob Corker (R-Tenn.).
The full text of the bill as introduced can be downloaded here: http://coons.senate.gov/media/bankruptcyjudgeships.pdf
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