Sifma, LSTA ask federal committee to repeal informal bankruptcy committee disclosure rule

By Caroline Salls

Pittsburgh, Dec. 7 - The Securities Industry and Financial Markets Association (Sifma) and the Loan Syndications and Trading Association (LSTA) have asked the Committee on Rules of Practice and Procedure of the Judicial Conference of the United States to repeal a bankruptcy rule that requires informal committee members to disclose claim information.

According to a letter from Sifma and LSTA to Peter G. McCabe of the rules and practice committee, Federal Rule of Bankruptcy Procedure 2019 specifically requires informal committee members to disclose information on the amount of their claims, their employment, how and why the informal committee was formed and when their respective claims were purchased or sold.

Sifma and LSTA said the rule should be repealed because it has very little use in the administration of Chapter 11 bankruptcy cases; the information required to be disclosed is already readily available; the rule "irrationally and inefficiently singles out" interested parties who choose to form informal committees; and the rule could negatively affect a company's reorganization proceedings.

Sifma and LSTA are non-profit organizations that promote sound practices and advocate effective policies for the commercial loan and securities markets.

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