ASSEMBLY RESOLUTION No. 108

STATE OF NEW JERSEY

INTRODUCED JUNE 17, 1996

By Assemblyman IMPREVEDUTO

An Assembly Resolution urging the Congress of the United States to amend the federal bankruptcy law to protect individual consumers in a manner separate from corporate creditors under certain circumstances.

Whereas, An uncertain economic climate has resulted in a large number of retail companies across the country and in New Jersey declaring bankruptcy; and

Whereas, Consumers who purchase gift certificates or merchandise may not be aware or have prior knowledge of a company's economic performance and possible pending declaration of bankruptcy, and do not know their rights relevant thereto; and

Whereas, Individual consumers are not in a position to adequately assess the financial stability of a store or its parent corporation; and

Whereas, Consumers who are holding gift certificates are unable to use them while the store is in bankruptcy proceedings, and similarly, persons wishing to return items are unable to obtain refunds for the merchandise; and

Whereas, These individual consumers are put in the same position as corporate creditors by having to file a form in bankruptcy court to be reimbursed; and

Whereas, It is inappropriate to treat individual consumers in the same manner as corporate creditors; and

Whereas, It is appropriate to urge Congress to amend the federal bankruptcy law to protect individual consumers in a manner separate from corporate creditors under certain circumstances; now, therefore,

    Be It Resolved by the General Assembly of the State of New Jersey:

    1. This House urges the Congress of the United States to amend the federal bankruptcy law to protect individual consumers in a manner separate from corporate creditors as follows:

    a. Individual consumers holding gift certificates or wishing to exchange or return merchandise to a store that is still in business should be allowed to receive a full refund without having to file a form in bankruptcy court.

    b. Individual consumers holding gift certificates or wishing to exchange or return merchandise for a store that has gone out of business should receive a higher level of priority on the list of creditors filing in bankruptcy court than corporate creditors.

    2. Duly authenticated copies of this resolution, signed by the Speaker of the General Assembly and attested by the Clerk of the General Assembly, shall be transmitted to the presiding officers of the United States Congress, the chairs of the appropriate standing committees of Congress, and each member of Congress elected thereto from New Jersey.

STATEMENT

    This resolution urges the United States Congress to make changes in the federal bankruptcy law to protect individual consumers under certain circumstances. This resolution recognizes that a large number of companies are going out of business and declaring bankruptcy. Consumers do not have knowledge of the financial stability of companies. Consumers who hold gift certificates are unable to use them while bankruptcy proceedings go forward, and similarly, consumers wishing to return items are unable to receive refunds for the merchandise. Some businesses who file for Chapter 11 plan to emerge from bankruptcy protection. Others plan to liquidate and want to generate as much money as possible to repay creditors. This resolution urges Congress to amend the federal bankruptcy law to protect individual consumers in a manner separate from other creditors under the circumstances described. The resolution would urge Congress to amend the federal bankruptcy law to treat individual consumers differently in two ways. First, individual consumers holding gift certificates or wishing to exchange or return merchandise for a store that is still in business should be able to receive a full refund without having to file a form in bankruptcy court. Second, individual consumers holding gift certificates or wishing to exchange or return merchandise for a store that has gone out of business should be able to receive a higher level of priority on the list of creditors than corporate creditors.

Urges Congress to amend federal bankruptcy law to protect individual consumers under certain circumstances.