NACM teams up with CLLA to present legal symposium.(CREDIT COLUMN)(Commercial Law League of America)(National Association of Credit Management)

NACM members got the opportunity to attend a Legal Symposium, Nov. 10-11, held in conjunction with the 86th New York Meeting of the Commercial Law League of America's (CLLA) Eastern Region Members' Association. This collaborative educational effort also provided an opportunity for NACM and CLLA members to network and forge new business and social friendships while discussing issues of mutual interest.

The first session was entitled "BAPCPA: One Year Later." BAPCPA (Bankruptcy Abuse Prevention and Consumer Protection Act of 2005) was an important milestone for business creditors, as it affected important issues, such as preferences and reclamation rights. Even though BAPCPA provisions did not take effect until Oct. 17, 2006, there has already been a significant amount of bankruptcy court activity and case law surrounding the legislation. On hand to lead the session were two bankruptcy court judges and several distinguished experts on bankruptcy law. The judges were Hon. C. Ray Mullin, U.S. Bankruptcy Court for the Northern District of Georgia and Hon. Robert D. Drain, U.S. Bankruptcy Court for the Southern District of New York. Mullin contended that there were some unfortunate ambiguities in the Act. "I think you've heard that BAPCPA is not the most clearly written law." However, he noted that such confusions might be cleared up after appeals or when U.S. Circuit Courts start issuing decisions on bankruptcy cases brought before them. Another session leader, Professor Ray Warner, St. John's University School of Law, concurred that provisions of the law were poorly drafted. "It's very hard to say what Congress intended," he said. "With some of these amendments you have to go back to the original act to see Congressional intent." Warner also noted an important change regarding preferences. Under the old law, a trade creditor had to prove the alleged preference payment was both in the ordinary course of business between creditor and debtor as well as for the industry as a whole. Now, trade creditors have to prove only one of the conditions in order to successfully defend against a preference claim. "Theoretically, you should be able to win much easier," Warner added.

NACM advisor and bankruptcy expert Bruce Nathan, Esq. of Lowenstein Sandier, PC led the session entitled "Sales and Puts of Trade Claims: The Risks and Rewards." Creditors may help manage their risk to debtors at risk who will or have fried a Chapter 11 bankruptcy claim by selling their pre-petition unsecured claims Nathan said. They may also enter into a put arrangement that shifts to a third party the credit risk of dealing with a customer that either might eventually file bankruptcy and/or is already a Chapter 11 debtor. Scott Friedman, Avenue Capital Group and Dilek Akpinar, CCE, Pfizer, Inc., discussed the risks and rewards of ...