Senator Coons, chair of the Senate Judiciary Subcommittee on Bankruptcy and the Courts, spoke on the Senate floor Thursday about the government shutdown's impact on the Judicial Branch of the United States, which will run out of reserve funds next Tuesday. As Subcommittee chair, Senator Coons is responsible for oversight of the nation's federal court system and has been reaching out to federal judges and clerks over the last week to find out how they are planning to move forward after funds are depleted Tuesday. On Thursday, the head of the Third Circuit, which includes Delaware, announced that almost all personnel would be deemed "essential" — a decision Senator Coons endorsed in his speech.
The News Journal: On Saturday, the News Journal editorialized on the importance of the Temporary Bankruptcy Judgeship Extension Act, which was introduced by Senator Chris Coons in November and signed into law by President Obama on Friday. The law reauthorizes 29 temporary bankruptcy judgeships, including five in Delaware, ensuring that the judgeships are not lost due to the retirement, resignation, death or removal of the judge.
There’s no way for this country to get beyond the economic malaise of the last three to four years without sufficient bankruptcy judges on the bench.
On Friday President Obama affirmed this reality with his signature on the Temporary Bankruptcy Judgeship Extension Act.
“This law will stave off a grave shortage of bankruptcy judges in many districts around this country, which could have impaired the abilities of courts in those districts to do just that,” said Sen. Chris Coons, who introduced the legislation back in November.
On Thursday, the Senate passed legislation authored by Senator Coons to avert a crisis in America’s bankruptcy courts system. Chris introduced the Temporary Bankruptcy Judgeship Extension Act to extend 29 temporary bankruptcy judgeships in 14 states and Puerto Rico — including five judgeships in Delaware — at risk of expiration and dramatically overburdening these key federal courts.
Without Congressional action, when a judge in one of these temporary appointments retired, resigned or died in office, they could not be replaced – leaving other judges to take on their caseloads and slowing down the system for everyone. Bankruptcy courts help individuals get a fresh start and corporations restructure without having to lay off workers, making them extremely important to Delaware’s economy.
“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.”
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.
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.”
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.), and Bob Corker (R-Tenn.).
The Wall Street JournalonTuesday published an article on the still-urgent need for the extension of dozens of temporary bankruptcy judgeships to avert a crisis in America’s bankruptcy courts. Senator Chris Coons introduced the bipartisan Temporary Bankruptcy Judgeship Actin November to extend the authorizations for 30 temporary bankruptcy judgeships in 14 states and Puerto Rico and prevent un-fillable vacancies. The bill was voted out of the Judiciary Committee in December and now awaits consideration by the full Senate.
While legislation to ease the pain is stalled in Congress, some bankruptcy courts are bringing in visiting judges and asking judges to work more hours. And judges who are eligible to retire are grappling with whether to stay or go.
“The word guilt certainly can describe some feelings,” Judge Arthur Gonzalez told NLJ of his recent retirement from the U.S. Bankruptcy Court for the Southern District of New York.
Gonzalez’s departure means a lost judicial seat in one of the busiest bankruptcy courts in the country thanks to a pro-debtor reputation that attracts giant corporations like Borders and General Motors.
His seat is one of two judgeships lost so far upon the expiration of Congress’ temporary judgeship program, under which lawmakers created 28 temporary judicial spots. If any judges left during the five-year program, courts could fill the vacancy. But once the program ran out, the seat of any departing judge–whether permanent or temporary–would go unfilled.
The House of Representatives passed a bill to extend 30 temporary judgeships for five years, and the legislation’s counterpart remains pending in the Senate. But some lawmakers are concerned about the cost of the respective bills, sponsored by Sen. Christopher Coons of Delaware and Rep. Lamar Smith of Texas. The nonpartisan Congressional Budget Office has estimated that the Senate bill could cost about $5 million over five years, depending upon the number of vacancies to be filled.
Click here to read the full article on The Wall Street Journal’s website.