Closing Bankruptcy Loopholes for Child Predators Act of 2024

Bill: 118-hr-8077
Sponsor: full_name: Rep. Ross, Deborah K. [D-NC-2]
Introduced: 2024-04-18
Policy area: Finance and Financial Sector
Latest action: action_date: 2024-04-18
text: Referred to the House Committee on the Judiciary.

Summaries:

tv_txt: I 118th CONGRESS 2d Session H. R. 8077 IN THE HOUSE OF REPRESENTATIVES April 18, 2024 Ms. Ross (for herself and Ms. Tenney ) introduced the following bill; which was referred to the Committee on the Judiciary A BILL 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.

1. Short title This Act may be cited as the Closing Bankruptcy Loopholes for Child Predators Act of 2024 . 2. Amendments (a) Amendments Title 11, United States Code, is amended— (1) in section 101— (A) by redesignating paragraphs (51B), (51C), and (51D) as paragraphs (51C), (51D), and (51E), respectively, and (B) by inserting after paragraph (51A) the following: (51B) The term ‘sexual abuse of a child’ means any act that— (A) constitutes a violation of— (i) section 1589, 1590, 1591, 2241(c), 2242, 2243, 2251, 2251A, 2252, 2252A, 2260, 2421, 2422, or 2423, 2258, or 2258A, of title 18; (ii) section 20341 of title 34; or (iii) a non-Federal law that is similar to a law described in clause (i); (B) by reason of the conduct prohibited, a person who, while a minor, was aggrieved. ; (2) by amending section 1109(c) to read as follows: (c) A party in interest, including the debtor, the trustee, a creditors’ committee, an equity security holders’ committee, a creditor, an equity security holder, or any indenture trustee, may raise and may appear and be heard on any issue in a case under this chapter. In any case in which a claim is filed against the debtor arising out of the alleged sexual abuse of a child, the court shall hold a conference within 60 days of the deadline by which proofs of claim must be filed to consider victim impact statements. (d) The sole purpose of victim impact statements shall be to increase engagement and understanding between the bankruptcy court and victims or survivors of child sexual assault. To encourage candor, and thus enhance the utility of victim impact statements, the information provided through victim impact statements is not, and shall not be used as, evidence by any person in the case. , (3) in section 1101— (A) by in paragraph (2) by striking the period at the end and inserting ; and , and (B) by adding at end the following: (3) ‘‘victim impact statement’’ means a voluntary written, oral, video, or audio statement, submitted to, or presented to the court in the name of the victim or under a pseudonym, describing the emotional, physical, familial, or financial impact suffered as a result of the sexual abuse of the victim who is a creditor of the debtor in a chapter 11 proceeding. , (4) in section 541 by adding at end the following: (g) In all cases regarding debts or other financial liability arising from allegations of sexual abuse of a child, involving debtors that are organizations described in section 501(c)(3) of the Internal Revenue Code of 1986 and exempt from tax under section 501(a) of such Code, the Court shall engage the services of an independent forensic accountant to review the assets and interests of such debtor, and any nondebtor sought to be released from liability in a proposed reorganization plan, and require preparation of a report to assist the Court with ensuring that such assets and interests are properly included or excluded from the estate. , (5) in section 107— (A) in subsection (b) by adding at the end the following: This subsection shall not apply to cases regarding debts or other financial liability arising from potential liability stemming from allegations of sexual abuse of a child except to the extent necessary to protect the identity and personal information of the person(s) alleging that they were abused unless the alleged offender is found innocent of abuse in a court of law. , (B) by amending subsection (d) to read as follows: (d) Except no court order shall seal any evidence of alleged crimes relating to the sexual abuse of a child other than to protect the identity and personal information of the person(s) alleging that they were abused unless the alleged offender is found innocent of abuse in a court of law. , (6) in section 362(b)(2)(A)— (A) in clause (iv) by striking or at the end, (B) in clause (v) by adding or at the end, and (C) by adding at end the following: (vi) concerning the sexual abuse of a child or related claims; , (7) in section 524(g)(2)(B)(i) by inserting or relating to the sexual abuse of a child before the semicolon at the end, (8) in section 1111 by adding at the end the following: (c) Claims relating to sexual abuse of a child are deemed timely filed regardless of and notwithstanding the state statute of limitation otherwise applicable to the claim. , and (9) in section 1181 by adding at the end the following: (d) Prohibition on claims related to child sexual abuse Notwithstanding any provision of law to the contrary, no subchapter 5 filings shall be permitted for claims arising from or related to child sexual abuse. . (b) Clerical amendment The table of sections for chapter 1 of title 11, United States Code, is amended by adding at the end the following: 113. Suspension of stay without consent. . 3. Amendments to the Federal Rules of Bankruptcy Procedure The Federal Rules of Bankruptcy Procedure (11 U.S.C. app.) are amended— (1) in rule 2004— (A) by amending subsection (b) to read as follows: (b) Scope of Examination The examination of an entity under this rule or of the debtor under §343 of the Code may relate only to the acts, conduct, or property or to the liabilities and financial condition of the debtor, or to any matter which may affect the administration of the debtor’s estate, or to the debtor’s right to a discharge. In a family farmer’s debt adjustment case under chapter 12, an individual’s debt adjustment case under chapter 13, or a reorganization case under chapter 11 of the Code, other than for the reorganization of a railroad, the examination may also relate to the operation of any business and the desirability of its continuance, the source of any money or property acquired or to be acquired by the debtor for purposes of consummating a plan and the consideration given or offered therefor, and any other matter relevant to the case or to the formulation of a plan. In a reorganization case under chapter 11 of the Code related to the alleged sexual abuse of a child, the examination shall also relate to the abuse allegations against the debtor and any affiliated entity, remedial policies and responses to those allegations, information on the debtor or an affiliated entity’s finances and financial projections, and any other matter relevant to the case or to the formulation of a plan. , and (B) by amending subsection (c) to read as follows: (c) Compelling Attendance and Production of Documents or Electronically Stored Information The attendance of an entity for examination and to produce documents or electronically stored information, whether the examination is to be conducted within or without the district in which the case is pending, may be compelled as provided in Rule 9016 for the attendance of a witness at a hearing or trial. As an officer of the court, an attorney may issue and sign a subpoena on behalf of the court where the case is pending if the attorney is admitted to practice in that court. In a reorganization case under chapter 11 of the Code related to the alleged sexual abuse of a child, debtor attendance for examination and the production of documents or electronically stored information is required. , and (2) in rule 9018 by adding at the end the following: In no respect shall any court order seal any evidence of alleged crimes relating to the sexual abuse of a child other than to protect the identity and personal information of the person(s) alleging that they were abused unless the alleged offender is found innocent of abuse in a court of law. .