“To amend title 11 of the United States Code to address misuse of bankruptcy proceedings in cases of child sex abuse, and for other purposes.”
No CRS summary available for this bill.
This section amends the Bankruptcy Code to address bankruptcy cases involving allegations of sexual abuse of a child, particularly those filed by 501(c)(3) tax-exempt organizations. (1) In §101, it defines "sexual abuse of a child" as specified federal crimes (e.g., 18 U.S.C. §§1589, 1591, 2251) or similar non-Federal laws where the aggrieved person was a minor. (2) In §1109(b), it requires the court, in cases with related claims, to hold a conference within 60 days after the claims deadline to consider victim impact statements; it adds subsection (c) limiting such statements to promoting court engagement with victims and barring their use as evidence. (3) In §1101, it defines "victim impact statement" as a voluntary written, oral, video, or audio submission by (or on behalf of) a child sexual abuse victim who is a chapter 11 creditor, describing the impact suffered. (4) In §541(g), it requires courts, in cases by 501(c)(3) debtors involving such claims, to engage an independent forensic accountant to review the debtor's and any nondebtor releasee's assets and report on their inclusion in the estate. (5) In §107(b), it limits protection of information from public disclosure in such cases except to safeguard the alleged victim's identity and personal information unless the alleged offender is found not guilty; it adds subsection (d) barring court orders sealing evidence of alleged child sexual abuse crimes except as specified. (6) In §362(b)(2)(A), it excepts from the automatic stay proceedings concerning sexual abuse of a child or related claims. (7) In §524(g), it (A) applies channeling injunction requirements to child sexual abuse claims; (B) bars court approval of third-party releases without the debtor's and at least 90% of voting creditors' affirmative consent (new requirement) and requires third parties to provide decision-making information; (C) raises the voting threshold for approving claimant trusts to 90% (from 75%) in 501(c)(3) child sexual abuse cases; (D) expands enjoined third parties to include debtor affiliates; and (E) adds further restrictions on such 501(c)(3) cases.
This section amends Rule 2004 of the Federal Rules of Bankruptcy Procedure to expand the scope of examinations in chapter 11 reorganization cases related to alleged sexual abuse of a child to include abuse allegations against the debtor or affiliated entities, remedial policies and responses, finances and financial projections, and other relevant matters; and to require the debtor's attendance for examination and production of documents or electronically stored information. It further amends Rule 9018 to prohibit courts from sealing evidence of alleged crimes relating to sexual abuse of a child, except to protect the identity and personal information of the alleged victim unless the alleged offender is found not guilty in a court of law.