“In what has seemed a daily ritual, the Senate in the last two weeks has defeated the most modest attempts by Democrats to curb bankruptcy abuses by corrupt or troubled corporations and their senior executives.
The votes illustrate a new reality and a sharp swing of the pendulum in the Senate, which has nearly completed its work on the legislation that everyone expects will soon become law.
Just two and a half years ago, in the midst of plunging stock markets and widening business scandals that left many thousands of workers unemployed and without their retirement savings, fearful lawmakers rushed by a vote of 97 to 0 to adopt the Sarbanes-Oxley Act. It was the most aggressive federal anticorruption law Congress had adopted in decades. On the day of the Senate vote, the Dow Jones industrial average was down as much as 440 points. Days earlier, WorldCom executives disclosed the first details of the largest accounting fraud in history.
The lawmakers rejected a proposal to prohibit corrupt companies from issuing huge payouts to senior executives shortly before entering bankruptcy, blocked a measure that would have limited companies like Enron and WorldCom from shopping for the most favorable bankruptcy courts; such actions have had the effect of disenfranchising employees and retired workers from the process.
They defeated a proposal to protect those employees and retired workers when their companies go bankrupt, refused to close the "millionaire's loophole" that permits wealthy individuals to shelter their assets from lenders by creating special asset-protection trusts.
And on Wednesday, they rejected a nationwide limit on the homestead exemption, a provision that has enabled corporate executives to buy expensive homes in states like Florida and Texas to shelter their assets from creditors.
Now, as business scandals occupy a less prominent place in newspapers and the stock market is well above 2002 lows, the politics of financial regulation have sharply shifted.…”
"How quickly things change," said Ann Yerger, executive director of the Council of Institutional Investors, a group of major shareholders that sought tough corporate governance and accounting rules. "It's been stunning. In the past few months alone, there has been a clear push back from the corporate community, and it has resonated. Folks have short memories, and there is a perception that the Enrons are behind us.
"We now spend much of our time trying to hold onto the reforms we had won," she added.
During the recent debate on tightening the bankruptcy code, the lawmakers rejected a proposal to prohibit corrupt companies from issuing huge payouts to senior executives shortly before entering bankruptcy. They blocked consideration of a measure that would have curtailed the ability of companies like Enron and WorldCom to shop for the most favorable bankruptcy courts; such actions have had the effect of disenfranchising employees and retired workers from the process.
They defeated a proposal to protect those employees and retired workers when their companies go bankrupt. They refused to close the "millionaire's loophole" that permits wealthy individuals to shelter their assets from lenders by creating special asset-protection trusts.
And on Wednesday, they rejected a proposal to put a nationwide limit on the homestead exemption, a provision that has enabled corporate executives to buy expensive homes in states like Florida and Texas to shelter their assets from creditors.…
http://www.nytimes.com/2005/03/10/business/10bankrupt.html
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