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34 Bus. Law. 1309 (1978-1979)
Business Reorganizations under Chapter 11 of the New Bankruptcy Code

handle is hein.journals/busl34 and id is 1311 raw text is: Business Reorganizations Under Chapter 11 of the New Bankruptcy Code By J. RONALD TROST* Congress has repealed the present, bankruptcy law and replaced it with a totally new bankruptcy code which will become effective October 1, 1979.1 The bankruptcy court has been strengthened; unless, in its sole discretion it abstains, the bankruptcy court will have exclusive civil jurisdiction over all matters related to a bankruptcy case, except for the power to punish for criminal contempt and to enjoin another court.' Bankruptcy judges will be appointed by the President' for terms of 14 years.4 A five year experimental program in 18 judicial districts establishes a governmental administrator to supervise private trustees5 to determine if this is a feasible means of relieving bankruptcy judges of their administrative duties. Consumers get their share of benefits: reaffirmation of consumer debts is conditioned upon court approval, and, unless a state disapproves, a federal exemption policy sets a minimum list of necessaries that are exempt in bankruptcy.7 Availability of the popular wage earner plan is expanded and its provisions strengthened. The trustee's *Member of the California Bar. The author wishes to acknowledge the contribution of Kenneth N. Klee, also of the Calfornia bar, in the preparation of this article. Mr. Klee, associate counsel to the House Judiciary Committee, was one of the principal draftsmen of the new Bankruptcy Code. Mr. Klee's insight into what the draftsman intended was pointedly and frequently expressed to the author; and occasionally his views influenced the text. 1. Title I of The Bankruptcy Act of 1978, Pub. L. No. 95-598, 92 Stat. 2549, (1978) contains the substantive bankruptcy law that is found in II U.S.C. §§ 101-1330 (1978). An experimental program for United States Trustees, effective in some 18 judicial districts for 4 years, is contained in I I U.S.C. §§ 1501-151163 (1978). Title II contains the amendments to the Judicial Code which govern the creation, operation and jurisdiction of the bankruptcy court. Title Ill contains amendments to a variety of other federal laws and title IV contains the transition and repealer provisions. 2. 28 U.S.C. § 1471 (1978). As a result of a political compromise the exclusive jurisdiction is vested, in the first instance, in the United States district courts. Id. § 1471(a). The bankruptcy courts are then vested with all jurisdiction vested in the district courts. Id. § 1471(c). The bankruptcy court, out of an abundance of caution, is, in addition, vested with the familiar exclusive jurisdiction of all of the property, wherever located, of the debtor, as of the commencement of such case. Id. § 1471 (e). The bankruptcy court may, in the interest of justice, abstain from exercising its jurisdiction but the decision to abstain or not is not reviewable by appeal or otherwise. Id. § 1471 (d). The legislative history makes absolutely clear that Congress intended to eliminate the present distinction between plenary and summary jurisdiction in bankruptcy and to vest all jurisdiction over bankruptcy litigation and proceedings in the bankruptcy court. See, e.g., 124 Cong. Rec. H 11,107-H 11,108 (daily ed. Sept. 28, 1978) (remarks of Rep. Don Edwards). 3. 28 U.S.C. § 152 (1978). 4. Id. § 153(a). 5. 11 U.S.C. §§ 1501-151163 (1978). 6. Id. § 524(c) 7. Id. § 522. 1309

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