The State Department is opposed to a provision in the pending Bankruptcy Reform Bill that would effectively prevent Lloyd’s from collecting money from several hundred wealthy American “Names” who have refused to pay judgments.
The New York Times reported the story today, saying that Sec. Of State Colin Powell testified before the Senate Budget Committee, telling them of the State Department’s opposition.
“We strongly oppose it,” Powell is quoted as saying. “It will cause international difficulties, and it opens up other opportunities for others to try to seek similar relief.”
Lloyd’s has already issued statements attacking the measure, and several critics have called it a payback for wealthy political campaign contributors. While the bankruptcy bill, which is strongly supported by banks and credit card companies, seeks to tighten the rules governing personal bankruptcy in order to force more debtors to pay the amounts they owe, the Lloyd’s provision would do the exact opposite by protecting wealthy individuals from their incurred liabilities, if they make a showing that there was fraud involved.
Lloyd’s points out that despite numerous court cases, no instances of fraud or misrepresentation on its part has ever been upheld. The Senate voted to cut off debate on the bill, leaving the Lloyd’s provision intact, and a full vote is expected to occur soon.
Was this article valuable?
Here are more articles you may enjoy.