H.R. 8589

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 8589 Introduced in House (IH)]

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119th CONGRESS
2d Session
H. R. 8589

To amend title 11 of the United States Code to address misuse of 
bankruptcy proceedings in cases of child sex abuse, and for other 
purposes.

_______________________________________________________________________

IN THE HOUSE OF REPRESENTATIVES

April 29, 2026

Ms. Ross (for herself, Ms. Tenney, Mrs. Sykes, and Ms. De La Cruz) 
introduced the following bill; which was referred to the Committee on 
the Judiciary

_______________________________________________________________________

A BILL

To amend title 11 of the United States Code to address misuse of 
bankruptcy proceedings in cases of child sex abuse, and for other 
purposes.

Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the ``Closing Bankruptcy Loopholes for 
Child Predators Act of 2026''.

SEC. 2. AMENDMENTS.

(a) Amendments.--Title 11, United States Code, is amended--
(1) in section 101--
(A) by redesignating paragraphs (51B), (51C), and 
(51D) as paragraphs (51C), (51D), and (51E), 
respectively, and
(B) by inserting after paragraph (51A) the 
following:
``(51B) The term `sexual abuse of a child' means any act 
that--
``(A) constitutes a violation of--
``(i) section 1589, 1590, 1591, 2241(c), 
2242, 2243, 2251, 2251A, 2252, 2252A, 2260, 
2421, 2422, or 2423, 2258, or 2258A, of title 
18;
``(ii) section 20341 of title 34; or
``(iii) a non-Federal law that is similar 
to a law described in clause (i); and
``(B) by reason of the conduct prohibited, a person 
who, while a minor, was aggrieved.'';'';
(2) in section 1109--
(A) by adding at the end of subsection (b) the 
following:
``In any case in which a claim is filed against the debtor arising out 
of the alleged sexual abuse of a child, the court shall hold a 
conference within 60 days of the deadline by which proofs of claim must 
be filed to consider victim impact statements.''.
(B) by adding at the end the following:
``(c) The sole purpose of victim impact statements shall be to 
increase engagement and understanding between the bankruptcy court and 
victims or survivors of child sexual assault. To encourage candor, and 
thus enhance the utility of victim impact statements, the information 
provided through victim impact statements is not, and shall not be used 
as, evidence by any person in the case.'';
(3) in section 1101--
(A) in paragraph (2) by striking the period at the 
end and inserting ``; and'', and
(B) by adding at end the following:
``(3) `victim impact statement' means a voluntary written, 
oral, video, or audio statement, submitted to, or presented to 
the court in the name of the victim or under a pseudonym, 
describing the emotional, physical, familial, or financial 
impact suffered as a result of the sexual abuse of the victim 
who is a creditor of the debtor in a chapter 11 proceeding.'';
(4) in section 541 by adding at end the following:
``(g) In all cases regarding debts or other financial liability 
arising from allegations of sexual abuse of a child and involving 
debtors that are organizations described in section 501(c)(3) of the 
Internal Revenue Code of 1986 and exempt from tax under section 501(a) 
of such Code, the Court shall engage the services of an independent 
forensic accountant to review the assets and interests of such debtor, 
and any nondebtor sought to be released from liability in a proposed 
reorganization plan, and require preparation of a report to assist the 
Court with ensuring that such assets and interests are properly 
included or excluded from the estate.'';
(5) in section 107--
(A) in subsection (b) by adding at the end the 
following:
``(4) This subsection shall not apply to cases regarding 
debts or other financial liability arising from potential 
liability stemming from allegations of sexual abuse of a child 
except to the extent necessary to protect the identity and 
personal information of the individual alleging to have been 
abused unless the alleged offender is found not guilty of abuse 
in a court of law.''; and
(B) by adding at the end the following:
``(d) No court order shall seal any evidence of alleged crimes 
relating to the sexual abuse of a child other than to protect the 
identity and personal information of the individual alleging to have 
been abused unless the alleged offender is found not guilty of abuse in 
a court of law.'';
(6) in section 362(b)(2)(A)--
(A) in clause (iv) by striking ``or'' at the end;
(B) in clause (v) by adding ``or'' at the end; and
(C) by adding at end the following:
``(vi) concerning the sexual abuse of a 
child or related claims;'';
(7) in section 524(g)(2)(B)--
(A) in clause (i) by inserting ``or relating to the 
sexual abuse of a child:'' after ``reorganization'';
(B) after clause (ii) by adding the following:
``(iii) Notwithstanding any provision of 
law to the contrary, in any case regarding 
potential debts or other financial liabilities 
arising from allegations of sexual abuse of a 
child--
``(I) No third-party release shall 
be approved by the court without 
affirmative consent of both the debtor 
and at least ninety percent of the 
creditors in interest entitled to vote 
and who do vote. The court shall ensure 
that the parties have been given 
adequate notice and opportunity to 
provide or withhold such consent.
``(II) Any third-party seeking the 
benefit of a release under this chapter 
shall provide sufficient information to 
allow an average creditor to make an 
informed decision about the release.'';
(C) in clause (ii)--
(i) by striking ``subject'' and all that 
follows through ``that--'' and inserting the 
following:
``except in the case of a plan reorganization filed by 
a debtor organized described in section 501(c)(3) of 
the Internal Revenue Code of 1986 and exempt from tax 
under section 501(a) of such Code to resolve claims 
alleging sexual abuse of a child, subject to subsection 
(h), the court determines that--''; and
(ii) by amending subclause (IV)(bb) to read 
as follows:
``(bb) a separate class or 
classes of claimants whose 
claims are to be addressed by a 
trust described in clause (i) 
is established and votes, by at 
least 75 percent of those 
voting, in favor of the plan 
or, if the debtor is an 
organization described in 
section 501(c)(3) of the 
Internal Revenue Code of 1986 
and exempt from tax under 
section 501(a) of such Code 
which has filed a case under 
chapter 11 of this title to 
resolve claims alleging sexual 
abuse of a child, by at least 
90 percent of a separate class 
or classes of the claimants 
whose claims are to be 
addressed by a trust described 
in clause (i).'';
(D) by adding at the end of section 
524(g)(4)(A)(ii) the following:
``(V) the third party being an 
affiliate of the debtor.''; and
(E) by adding at the end of section 524(g)(1)(C) 
the following:
``Notwithstanding any other provision of this chapter, 
if the debtor is an organization described in section 
501(c)(3) of the Internal Revenue Code of 1986 and 
exempt from tax under section 501(a) of such Code which 
has filed for a case under chapter 11 of this title to 
resolve claims alleging sexual abuse of a child, any 
third party who is identifiable from the terms of a 
plan of reorganization (by name or as part of an 
identifiable group) and is alleged to be directly or 
indirectly liable for the conduct of, claims against, 
or demands on the debtor, may be released from such 
liability if a separate class or classes of the 
claimants whose claims are to be addressed by a trust 
described in clause (i) is established votes, by at 
least 90 percent of those voting, in favor of the 
plan.'';
(8) in section 1111 by adding at the end the following:
``(c) Claims relating to sexual abuse of a child are deemed timely 
filed regardless of and notwithstanding the State statute of limitation 
otherwise applicable to the claims'';
(9) in section 523(a)(20)--
(A) by designating subsections (b), (c), (d), and 
(e) as subsections (c), (d), (e), and (f), 
respectively; and
(B) by adding after subsection (a) the following:
``(b) No debtor shall receive a discharge under section 727, 1141, 
1192 [1] 1228(a), 1228(b), or 1328(b) of this title, or qualify for any 
form of discharge, injunction, or release under a plan of 
reorganization or otherwise, with respect to any claim or debt arising 
from the sexual abuse of a minor in instances where such debtor was 
either responsible for the sexual abuse of a minor directly or acted 
with gross negligence for the safety of the abused minor(s) at issue. 
This shall apply to all debtors regardless of whether such debtors are 
an individual, a corporation. a limited partnership, a nonprofit 
entity, or any other person or entity seeking relief under this 
title.'' and
(10) in section 1181 by adding at the end the following:
``(d) Prohibition on Claims Related to Child Sexual Abuse.--
Notwithstanding any other provision of law, no subchapter 5 filings 
shall be permitted for claims arising from or related to child sexual 
abuse.''.
(b) Clerical Amendment.--The table of sections for chapter 1 of 
title 11, United States Code, is amended by adding at the end the 
following:

``113. Suspension of stay without consent.''.

SEC. 3. AMENDMENTS TO THE FEDERAL RULES OF BANKRUPTCY PROCEDURE.

The Federal Rules of Bankruptcy Procedure (11 U.S.C. app.) are 
amended--
(1) in rule 2004--
(A) by striking the period at the end of (b)(2)(C) 
and inserting ``; and'';
(B) by adding after (b)(2)(C) the following:
``(D) In a reorganization case under chapter 11 of 
the Code related to the alleged sexual abuse of a 
child, the examination shall also relate to the abuse 
allegations against the debtor and any affiliated 
entity, remedial policies and responses to those 
allegations, information on the debtor or an affiliated 
entity's finances and financial projections, and any 
other matter relevant to the case or to the formulation 
of a plan.''; and
(C) by adding at the end of subsection (c) the 
following:
``In a reorganization case under chapter 11 of the Code related to the 
alleged sexual abuse of a child, debtor attendance for examination and 
the production of documents or electronically stored information is 
required.''; and
(2) in rule 9018 by adding at the end the following:
``(c) In no respect shall any court order seal any evidence of 
alleged crimes relating to the sexual abuse of a child other than to 
protect the identity and personal information of the individual 
alleging to have been abused unless the alleged offender is found not 
guilty of abuse in a court of law.''.
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