In the current bankruptcy theater, Rule 20191 occupies center stage. It has not always been at the center, and it is unclear how much longer it will remain there—or on stage at all. The rule was enacted in the 1930s, but existed in obscurity for the better part of 65 years. Since the turn of the century, however, it has received tremendous attention. In fact, after nearly two years of arduous debate the U.S. Supreme Court recently submitted to Congress a revamped and overhauled version of 2019, aimed at addressing perceived deficiencies.
The purpose of the rule remains the same as it ever was: to provide transparency by requiring disclosure of information related to claims and the holders. While the general intent of the proposed amendment is to “expand the scope of the rule’s coverage and the content of its disclosure requirements,”2 it also attempts to temper the ability to use 2019 as a strategic tool to gain leverage. The proposed amendment becomes effective on Dec. 1, 2011, absent Congressional override.3
Journey From Obscurity
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