Bankruptcy Relief At Last by Lesley Hensell After months of lobbying by the real estate industry, the U.S. Senate at last has passed bankruptcy reform legislation.Commercial real estate owners across the country see this new law as key to their own financial protection. The bill, which is similar to legislation passed by the U.S. House last year, eliminates a cap on the value of properties involved in single-asset bankruptcy cases. It also closes the loophole on residential tenant abuse and provides protections for shopping center owners. Under current law, properties with a value of less than $4 million are subject to an automatic stay from creditors for 90 days. But the stay for properties of over $4 million can be extended for more than six months. With the new legislation, the distinction will be removed between properties valued below or above $4 million, creating a level playing field. In the arena of rental housing, the new legislation closes a loophole allowing a residential tenant to delay eviction by declaring bankruptcy. As a result, tenants file bankruptcy and refuse to pay rent, costing landlords hundreds of dollars of lost rents and legal fees to pursue bankruptcy remedies. This legislation will close this loophole and put a stop to tenant abuse that ultimately drives up housing costs. The legislation also addresses the issue of shopping center bankruptcy. Current law allows shopping center tenants declaring bankruptcy up to 60 days to make the decision to assume or reject leases, but courts routinely extend this time for many months. This legislation limits the discretion of the courts to provide lengthy extensions of deadlines. The National Association of REALTORS® has long worked to enact this legislation. Let's hope it is signed into law soon. In other news, stock buybacks and executive commitment combined in an interesting play to win shareholder kudos while propping up equity prices at New York-based Cendant Corporation (NYSE: CD). Harry Silverman, the company's chairman, president and CEO, has fulfilled a promise to shareholders to own 1.5 million common shares outright. Silverman, who previously owned 300,000 shares, exercised 3 million options granted in 1991 and sold 1.8 million common shares. The proceeds were used to purchase 1.2 million shares of Cendant common stock, pay taxes on the transaction and to fund charitable giving commitments. "I am pleased to complete this program," Silverman said. "All of our senior managers have been asked to achieve meaningful levels of direct stock ownership over time. This further aligns my interests with those of our shareholders." Silverman indicated that, after this transaction, he holds roughly 7 million additional options scheduled to expire in 2001. These options were granted in 1991 in conjunction with his founding of HFS, a predecessor to Cendant. In order to minimize the market impact of stock sales associated with the exercise of these options, Silverman intends to exercise roughly equal portions of these options each quarter from now until their expiration next year. On top of that, Silverman holds about 36 million Cendant stock options that expire in 2002 through 2010. A portion of cash realized from these transactions will go to Silverman's charitable interests - he is a trustee of the University of Pennsylvania, New York University and the Whitney Museum of American Art. His pledges to these institutions exceed $25 million. What better way to convince stockholders that the company will do well than to be a major investor and know all of the inside dope? | 
