Judge Walrath. Yes. Thank you, Mr. Chairman and members of the House Judiciary Committee. My name is Mary Walrath. I have been sitting as a bankruptcy judge in the District of Delaware since 1998. I am currently the president of the National Conference of Bankruptcy Judges, which represents all 350 bankruptcy judges. However, I am here in my personal capacity, and I can take no position for or against any specific legislation pending before Congress. But as a bankruptcy judge, I have had experience dealing with large corporate bankruptcies and presided over the case filed by the holding company of Washington Mutual Bank. A bill that allows for voluntary bankruptcy proceedings involving holding companies of financial institutions, even systemically important ones, before the financial institution is seized and sold is a laudable goal. There are several reasons why I believe this is good. First, bankruptcy laws are familiar to the public. More than any other part of the Federal judicial system, the general public comes into contact most often with bankruptcy courts. In this instance, there are between 800,000 and 1.6 million bankruptcy cases filed annually, including more than 7,000 business bankruptcy cases. In addition to the number of debtors who file bankruptcy, however, hundreds of thousands of people come in contact with the bankruptcy system, as creditors, employees, retirees, landlords, customers, and vendors of debtors in bankruptcy. The process has become so familiar to the public that a large percentage of individuals who file bankruptcy do so without the benefit of counsel. In addition, even in the largest corporate bankruptcy cases, individuals with claims against the debtor feel comfortable enough about the process to proceed without counsel. In contrast, few people and attorneys have ever been involved in proceedings dealing with the Federal Deposit Insurance Corporation. People just do not know what it is and have never had any experience with it. If Congress wants to instill confidence in the public about the resolution of a systemically important financial institution, it is wise to use a process with which the public is familiar. Second, in contrast to FDIC proceedings, bankruptcy cases are largely transparent. Today, all bankruptcy pleadings are filed electronically and are readily accessible to the public. Bankruptcy hearings are open to the public and most courts allow parties in interest, including small creditors and shareholders, to appear and to listen telephonically, even to appear and make their case without the benefit of counsel, and many have done so successfully. It is also important that the Bankruptcy Court provides a forum for negotiation and consensual resolution without the need for a contested hearing or trial, but with the assurance that a court is available if there is not consensus. In fact, plans of reorganization in Chapter 11 are premised largely on consensus and agreement. Third, bankruptcy courts are used to holding hearings on short notice and making expeditious rulings. In large corporate bankruptcy cases, even where assets exceed $100 million, first- day hearings are held within a day or two of a Chapter 11 filing, to address emergency matters that will keep the business operating. The legislation before you has similar expedited notice provisions. The Bankruptcy Court should be able to handle such an expedited schedule with only minor adjustments. I would, however, strongly urge Congress to consider requiring more judges be designated to handle these matters, just to be sure there is one available when the need arises. The legislation also asks that the Bankruptcy Court should consider the systemic risk to the markets in making its rulings. While that is not always done, the courts are fully capable of considering that factor and, if evidence is presented, making a ruling appropriately. In addition to the advantages of a voluntary bankruptcy option, I understand the legislation seeks to avoid the necessity to borrow funds from the Treasury, even on a temporary basis. The holding company would be expected, consistent with its living will, to have sufficient funds to fund the operating entities, to assure they are viable in the event of a bankruptcy filing. In sum, I think that the legislation properly provides an option for a holding company to either file a Chapter 11 petition, to file a Subchapter V petition, or to allow for resolution under the FDIC regime. So thank you very much for allowing me to express my views. Judge Walrath's written statement is available at the Committee or on the Committee Repository at: http:// docs.house.gov/meetings/JU/JU05/20170323/105758/HHRG-115-JU05- Wstate-WalrathM-20170323.pdf. Mr. Marino. Thank you, Judge. Dr. Taylor, please.