Copyright 2002 The Washington Post
The Washington
Post
April 23, 2002, Tuesday, Final Edition
SECTION: A SECTION; Pg. A05
LENGTH: 349 words
HEADLINE:
Bankruptcy Reform Inspired by Enron; Amendment Would Cap Home Shield
BYLINE: Kathleen Day, Washington Post Staff Writer
BODY:
Congressional staff trying to
reconcile the House and Senate versions of bankruptcy legislation have added an
Enron-inspired amendment to the list of items to haggle over: a proposal to
severely cut the amount of home equity that an individual who has violated
federal securities law could shield from creditors during bankruptcy.
The proposal would cap at "several hundred thousand dollars" the home
equity that could be kept by an individual filing for bankruptcy in Texas or the
four other states that currently set no limit on the amount of home equity that
can be shielded, according to congressional sources.
Sources said the
amendment, proposed by Sen. Herb Kohl (D-Wis.), is gaining backing from both
Republicans and Democrats, inspired by reports of former Enron Corp. chairman
Kenneth L. Lay's $ 7 million penthouse apartment in Houston -- even though Lay
has not been charged with any wrongdoing and has not filed for bankruptcy. In
what would be the most substantial overhaul of federal bankruptcy law in more
than two decades, the House and Senate last year each passed versions of
legislation that, in general, would make it harder for individuals to wipe out
debt by declaring bankruptcy.
But the two chambers have been unable to
reconcile key differences of opinion. One is over how much equity bankruptcy
filers should be allowed to keep in their homes. The Enron-inspired provision is
a small part of this issue.
The other is language in the Senate version
that is aimed at preventing anyone convicted of blocking an entrance to an
abortion clinic from filing for bankruptcy to
avoid paying court-imposed fines. Abortion foes have opposed
that provision.
A group of lawmakers from the House and Senate are
scheduled to meet this afternoon for a public conference to try to craft a
compromise that both chambers could then vote on. But congressional sources
cautioned that although the legislation looks much more viable than it did late
last year, the sticking points are the same ones that have helped kill similar
proposals in the past.
LOAD-DATE: April 23,
2002 
