• Letter from Laura Unger, Acting Chairman of the SEC, to Michael G. Oxley, Chairman, House Committee on Financial Services
• Letter from Senator Mary Landrieu to Senator Orrin Hatch, Chairman, Senate Committee on the Judiciary
• Letter from Senator Howell Heflin (retired) to Senator Russell Feingold
• Letter from Rep. Henry Hyde, House Committee on International Relations, to Senator Jesse Helms, Chairman, Senate Committe on Foreign Relations

II. Senator Mary Landrieu, requesting that letters from Names be printed in the Congressional Record at the request of Senator Landrieu:

• Letter from Edith Anthoine
• Letters from Joan B. Wilson
• Letter from Beverly Hudson
• Letter from Ruth G. Tufts
• Letter from Shirley M. Cook
• Second letter from Joan B. Wilson
• Letter from Barbara Lyons
• Letter from Thomas O. Lind

Roll call of the Vote - the Yea's and the Nay's

Excerpts from the Congressional Record
March 15, 2001

Mrs. LANDRIEU. Mr. President, I have received a number of letters on this subject. I ask unanimous consent that they be printed in the RECORD.

There being no objection, the letters were ordered to be printed in the RECORD, as follows:

NEW YORK, NY.
Re 8-420 Bankruptcy Abuse Prevention and Consumer Protection Act of 2001, Sec. 1310. Enforcement of Certain Foreign Judgments Barred.
DEAR SENATOR LANDRIEU:
I write to enlist your support in protecting hundreds of innocent victims from what many consider to be the biggest, most sophisticated, deliberate securities fraud in financial history that has been perpetrated by Lloyd's of London.

In the mid-seventies, when Lloyd's realized the extent of their exposure from underwriting insurance policies exposed to huge losses from asbestosis and pollution they set out to recruit Americans and other foreign investors to fund their losses. They did this with what we now know were fallacious financial statements for unregistered securities. More than three thousand Americans, who are called Names, were recruited. They were induced on the basis of Lloyd's three hundred year history to undertake what was purported to be a safe, conservative investment. My involvement with Lloyd's has resulted, so far, in the loss of my family home, over three hundred thousand dollars and my good health. Stress from Lloyd's produced heart attack. Am 77.

Over the years, many Names have become old and the draining of their resources has brought much hardship to those employed and to those no longer employed, especially those who were counting on some income from their Lloyd's investment to help sustain them in retirement. The constant stress, effort and anxiety endured in battling for our constitutional right to a fair trail, which Lloyd's has fought with over eighty million dollars paid to lawyers, lobbyists and campaign contributions to legislators and insurance commissioners, has taken a toll on all of us. Names have already sacrificed millions of dollars, stock and real estate to satisfy Lloyd's claims, but they are not through with having us cover their losses and that is why we need your help in passing Sec. 1310. I implore you to resist efforts by those conspiring to deny Names of their right to due process. The deceit and arrogance of Lloyd's can no longer be tolerated.

For the full, sordid story of fraud at Lloyd's I refer you to www.truthaboutlloyds, the special twenty-four page report in the February 21, 2000 European Edition of Time magazine and current articles in the Los Angeles Times on the former California Insurance Commissioner's acceptance of gifts and four hundred thousand dollars from Lloyd's and their lawyers, LeBoeuf, Lamb, Greene & MacRae, for among other things promoting opposition in the insurance and legal communities to the just claims and interests of the Names.

Thank you for your kind attention and, I hope, your vote in favor of S. 420, Sec. 1310.

Yours truly,
EDITH ANTHOINE.

--

SAN ANTONIO TX,
March 13, 2001.
Hon. MARY LANDRIEU,
Hart Office Building, Washington, DC.

DEAR SENATOR LANDRIEU:
I am an 80-year-old grandmother who has worked and saved all my life and who attempts to live honorably, only to be cheated and lied to by fancy pants, smooth talking Englishmen representing Lloyd's of London. For the past decade I have been traumatized by their threats. Much of my life savings have been depleted by their fraudulent representations. They have used every legal trick known, plus many they invented, to keep out of U.S. courts because they, along with those who have aided and abetted them, know that their lawlessness and misdeeds would be exposed.

As I understand the Bankruptcy Bill, Section 1310 prohibits the granting of a foreign judgment without giving the defrauded defendant an opportunity to present the merits of his/her case in a U.S. court. It seems to me that any fair-minded person would savor the justice implicit in this Amendment. Foreign interlopers who commit fraud in this country should not use the technicalities of foreign judgments to harvest their fraudulent gains. This will provide Constitutional due process to me and other Lloyd's victims. It will also provide American due process to future victims of fraud by foreigners.

I urge, and count on you to enthusiastically support this Amendment. Thank you for your help on this vital matter.

Sincerely yours,
JOAN B. WILSON.

--

MARCH 13, 2001.
DEAR SENATOR LANDRIEU,
I am a senior citizen and am among those who have been hurt by Lloyds.

Right now, of course, I need what funds I do have to live on as I cannot work anymore. We (my now deceased husband & myself) had to sell an income producing apartment house in downtown Reno in order to pay what they requested of our letter of credit. In addition they wanted even more than that. We could not pay it. So, we were not ``wealthy Americans'' who could afford a big loss, or who refused to pay--we just didn't have it.

With the constant threat of Lloyds grabbing everything--life as you may understand--was not easy. However, compared to those who went bankrupt or homeless--as dreadful as our situation was, we were better off than those who went bankrupt or lost their homes. Lloyds is without a conscience.

Sincerely,
BEVERLY HUDSON.

--

NEW ORLEANS, LA,
March 13, 2001.
Re Section 1310 of the Bankruptcy Bill (S-420).
Hon. MARY LANDRIEU,
Hart Senate Office Building, Washington, DC.

DEAR SENATOR LANDRIEU:
I am a 72-year-old widow whose husband was an investor in Lloyd's of London along with my son and daughter. When my husband learned of Lloyd's fraud and the devastating affect it could have upon our two children he spent tireless hours attempting to right this very very wrong. It seemed at every turn, Lloyd's was far too powerful and far too well heeled, for my husband to fight this massive institution. As the stress continued to mount against him, in November of 1993 he died of a heart attack.

What Lloyd's of London did to my husband and my family, I will never forgive. It is my understanding that you are making the effort to stand up for the rights of Lloyd's investors by urging the passage of Section 1310 in the Bankruptcy Bill. It is my understanding that Section 1310 is designed to provide a level playing field, something that neither my husband nor children have had in connection with their investment at Lloyd's. You are absolutely doing the right thing.

I would ask that you let other colleagues in the Senate know that if Section 1310 is not passed it will likely wipe out all that my husband and two children have worked for. I ask for my children, that you ask your colleagues to pass Section 1310 and give all of Lloyd's investors a fighting chance to put Lloyd's fraud behind them forever.

I would also like to thank you very much on behalf of my family for taking the time to correct this wrong and not having asked for anything in return.

Thank you very much,
RUTH G. TUFTS.

--

SAN ANTONIO, TX,
March 13, 2001.
Senator MARY LANDRIEU of Louisiana, U.S. Senate.
I am writing to you about S. 420 Bankruptcy Bill, Sec. 1310. I am desperately in need of your support of this legislation. It will allow me to raise a defense of fraud prior to any enforcement of Lloyd's of London judgment against me issued by a thoroughly biased English Court. Why is Lloyd's so fearful of facing the U.S. Justice system if they are not guilty?

Lloyd's of London purposely withheld and actively concealed information from U.S. citizens regarding existing asbestos claims. I foolishly believed their prior reputation and invested the inheritance that my father worked so hard for--only to lose it all--and much more. I was repeatedly falsely reassured in written communications that ``things would certainly improve next year''. As you no doubt know, the U.S. Justice Department and Postal Service is currently investigating Lloyd's. How can they have any credibility at all? I resigned in 1993 and have been fighting them at great financial and emotional expense ever since.

I am not a wealthy person. I am the same Shirley Cook, third grade teacher, mentioned in the Time Magazine article of February 28, 2000. I am now retired, age 65 and receive slightly over $20,000.00 per year in retirement. I live in a quite average house with a leaky roof and currently drive a seven year automobile.

Lloyd's has offered me a ``settlement'' of its fraudulent claims against me, but offer no legitimate proof of the validity of their demands. Even worse, there is no finality. If they want more money anytime in the future, all they have to do is bill me. If I move, I must notify them of my whereabouts! In fact, by payment of the settlement offer, I absolve them of any past, present or future claim of fraud and give up all rights to recourse of any kind. This is certainly not the American way. It is a travesty, and to me, personally, a tragedy.

I implore you to vigorously support and vote for justice for the Americans, your constituents, who were ill treated by a foreign court favoring a dishonest foreign company.

Most respectfully,
SHIRLEY M. COOK.

--

SAN ANTONIO, TX,
March 13, 2001.
Hon. MARY LANDRIEU,
Hart Senate Office Building, Washington, DC.

DEAR SENATOR LANDRIEU:
As an 80 year old grandmother, who has been thoroughly skinned by Lloyd's of London, I am again dismayed by their arrogance and audacity in coming to Washington to oppose legislation aimed at assuring Americans Constitutional due process in United States courts.

It is obvious to me that they are afraid that a trial on the merits would expose their fraud and deviousness. The United States Department of Justice, the Postal Service and the California Attorney General all seem to smell a rat in their behavior. Please don't let them pull the wool over the eyes of the Senate. I plead with you to support Section 1310 of the Bankruptcy Bill.

Trusting your wisdom and support, I remain
Respectfully and sincerely yours,
JOAN B. WILSON.

--

NEW YORK, NY,
March 13, 2001.
Senator MARY LANDRIEU,
U.S. Senate, Washington, DC.

DEAR SENATOR LANDRIEU:
I write to you in explanation of why it seems so terribly important that you vote for the bill which includes section 1301: it's a request for your understanding of the difficulty of being 79 years old and under acute stress because I wait to see what terrible move Lloyd's will make next. I'm not the suicide type and I intend to fight to the last ditch, but they have made light of the many years I have worked and lived carefully, of the fact that I trusted them on their assurance that Names would be first in their consideration, that they would certainly honor my request for modest and safe participation in their investments.

I had a sum of money because I lost my husband in an airplane accident from which I miraculously was rescued. The court awarded me some money. That together with my earnings which were at the time $39,000 annually, gave me $400,000, which was enough for them to accept me. Obviously it had to be a modest participation. I told them my goals were to make a bit of supplementary money annually. They appeared to understand. But what they did was something else again. They put me on syndicates which they knew to be already treacherous--with upcoming liabilities of billions of dollars. What kind of a character does that? Do they deserve the immunity that their courts have granted them? The inside traders all took themselves off the syndicates. The man who handled my affairs retired (in his 50s) and I should have suspected.

I'm still working. I really dare not stop. If we can get 1301 through, we will not be ducking our debts. We will simply be getting the time and opportunity to bring our fraud charges to the American court system where we as citizens should be able to plead our case and have it aired once and for all. Please help to give us that chance. Thank you for your attention to my letter.

Sincerely yours,
BARBARA LYONS.

--

NEW ORLEANS, LA,
March 13, 2001.
Re Section 1310 of the Bankruptcy Bill (S-420).
Hon. MARY LANDRIEU,
Hart Senate Office Building, Washington, DC.

DEAR SENATOR LANDRIEU:
I respectfully urge your continued support of Section 1310 and that you inform your Senate colleagues of the importance of this provision, which will do no more than give me and hundreds of other defrauded U.S. citizens the ability to defend ourselves against the fraud perpetrated by Lloyd's of London. Already as a result of Lloyd's fraud, I have had several hundred thousand dollars confiscated by them; my wife and I have partitioned our community to protect what is left of our estate, and I have spent countless hours and spent thousands of dollars in attorneys fees preparing for bankruptcy and otherwise fighting the terrible Lloyd's nemace.

If Section 1310 is not adopted, it is highly likely that Lloyd's will successfully (and wrongly) reap the rewards of their fraud against those hundreds of U.S. citizens and, personally, require me to file for bankruptcy.

As always, your help in protecting me, the citizens of Louisiana, and in this case hundreds of U.S. citizens across the country, is most appreciated.

Sincerely,
THOMAS O. LIND.

---------------------------------

The PRESIDING OFFICER.
The Senator from Alabama has 7 1/2 minutes.

Mr. SESSIONS.
Mr. President, I will refer to a letter from Congressman HENRY HYDE, chairman of the House of Representatives Committee on International Relations and former chairman of the House Judiciary Committee, a man of great knowledge and experience. He says:

This provision does not impact State regulation of insurance and it does not violate any treaty obligations of this country. Consistent with the Hague Convention, recognition of a foreign award may be refused if the court in the country where enforcement is sought finds that ``recognition or enforcement of the award would be contrary to the public policy of that country.'' It certainly is contrary to the public policy of this country [Chairman Hyde continues] for an individual to be defrauded and then denied the right to assert fraud as a defense.

I ask unanimous consent to have printed in the RECORD letters from the former Chief Justice of the Supreme Court of Alabama, and a former Democratic Senator from this body, Howell Heflin, who said:

As a former judge, I am appalled at this entire situation.

I also ask unanimous consent to have a letter from Senator ROBERT KERREY of Nebraska and MARY LANDRIEU of Louisiana in reference to this matter, as well as a letter from Laura Unger, acting chairman of the Securities and Exchange Commission, printed in the RECORD.

There being no objection, the letters were ordered to be printed in the RECORD, as follows:

U.S. SECURITIES AND EXCHANGE COMMISSION,
Washington, DC, March 1, 2001.
Hon. MICHAEL G. OXLEY,
Chairman, Committee on Financial Services, House of Representatives,
Rayburn House Office Building, Washington, DC.

DEAR CHAIRMAN OXLEY:
Thank you for your letter dated February 28, 2001 regarding Lloyd's of London. As you stated in your letter, the SEC has filed a number of briefs amicus curiae with United States Courts of Appeals stating that forum selection provisions entered into between Lloyd's and plaintiffs in the cases violated the anti-waiver provisions of the United States federal securities laws. The SEC stated that these provisions acted to prohibit courts from giving effect to contractual provisions precluding purchasers from obtaining relief under the federal securities laws.

As we stated in our briefs, Congress has made a legislative determination of the rights and obligations necessary to protect investors in the United States and directed that those provisions cannot be waived. As a result, we continue to believe that the antiwaiver provisions of the federal securities laws render void any agreement to waive compliance with those laws. The SEC, however, submitted its briefs solely to address the legal issue of the applicability of the anti-waiver provisions and took no position on any other issue.

I hope this information is helpful. If you have any further questions, please do not hesitate to contact me.

Sincerely,
Laura S. Unger,
Acting Chairman.

--

U.S. SENATE,
Washington, DC, May 16, 2000.
Hon. ORRIN HATCH,
Chairman, Committee on the Judiciary, Washington, DC.

DEAR MR. CHAIRMAN:
We are writing you regarding an issue of concern to a number of us on both sides of the aisle. As we understand it, you are aware that English courts have entered summary judgments against hundreds of Americans who contend that they were defrauded in the United States by Lloyd's of London. These Americans were deprived of the right in these actions of raising a fraud defense to Lloyd's claims. As a result, they have asked Congress to give them the right to raise their fraud claims in any collection action brought by Lloyd's in the United States. They are merely asking to have their day in court.

Enclosed is a copy of the proposed language which would provide these Americans with the right to their day in court. As you will see, it is limited in scope and the burden of proof will be upon those seeking to raise a fraud defense to prove such fraud. The amendment would in no way mandate how a court might ultimately decide whether fraud occurred. It simply gives these Americans their day in court.

We hope that it could be included in the pending bankruptcy legislation when it emerges from conference. We would appreciate your consideration in this regard.

Sincerely,
Mary L. Landrieu,
U.S. Senator.

--

HOWELL HEFLIN, U.S. SENATOR (RETIRED),
Tuscumbia, AL, March 2, 2001.
Hon. RUSSELL D. FEINGOLD, U.S. Senator,
Hart Senate Office Building, Washington, DC.

DEAR RUSS:
I am writing you about a matter which will be on the Senate floor next week. I would prefer to visit directly with you, but unfortunately I am unable to make the trip at this time.

Our State Democratic Party chairman here in Alabama, Jack Miller, and his law firm are old friends and supporters who have been involved with me from the time I first ran for Chief Justice of the Alabama Supreme Court and throughout my political career. They tell me that over the last three years, they have been working with a group of Americans who invested in Lloyd's of London and they have been trying to help them secure ``their day in court.'' This group invested in the 1980s before it was generally known that Lloyd's was facing horrendous asbestos losses. When they invested, they were not told of these losses. Obviously, had they been aware of the losses, they would not have made the investments.

Despite the strong support of the SEC, including the SEC's filing of amicus briefs with various courts, these Americans have not been allowed to assert their claims of fraud by Lloyd's. Lloyd's has used an agreement executed by agents appointed by Lloyd's to preclude these Americans from raising fraud as a defense. Lloyd's did this by passing a by-law which authorized LLoyd's to appoint an agent for the investors. The agent then signed away the investors' right to assert fraud as a defense or to question how Lloyd's had calculated what they allegedly owed. As a result of the agent's actions, the investors were just given a sheet of paper with the amounts owed and no backup information and they were not permitted to question how the numbers were calculated. Some of the investors instructed their agent not to sign away their rights and those agents which followed the investors' instructions were replaced by Lloyd's with an agent which would do as LLoyd's instructed in direct contravention of the instructions from the principal.

As a former judge, I am appalled at this entire situation. As I understand it, the provision in the pending bankruptcy bill, Section 1310, simply will give these Americans the right to have their case heard. The burden will be on them to prove by clear and convicing evidence, the highest civil standard, that they were defrauded.

There are no treaty implications. The Hague Convention only applies to arbitral awards, not judgements. Further, Article V of the Convention permits host countries to refuse enforcement of judgements which contravene the public policy of the host country. It would be difficult to find a situation which is more clearly against our country's public policy.

I hear that you have been concerned over the increasing use of arbitration provisions in the United States. Likewise, I am seriously concerned. What LLoyd's is attempting to do takes such provisions to a new level. The consumer is not only expected to sign away his constitutional rights and securities law protections, it can be done for him by another who is appointed his agent by the other party.

Finally, I gather that you have some questions regarding how this provision became part of the bankruptcy bill. As I understand it, my friends here in Alabama have been working for years to find a legislative vehicle to help these Americans secure a day in court. They have had bipartisan support, including former Senator Bob Kerrey and Senator Mary Landrieu. During their efforts over the last several years, the firm contacted Senator Jeff Sessions since the firm and Senator Sessions are both from Mobile. As a former U.S. Attorney, Senator Sessions agreed that these people had not been accorded their rights and he agreed to support their efforts.

I know that my friends here in Alabama would like the opportunity to meet with you and to respond to any questions you might have concenring this matter. If your scheduled permits this to occur, please let me know.

Thank you for considering what I have to say. I hope that it won't be too long before we can visit in person again.

Sincerely yours,
HOWELL HEFLIN.

--

House of Representatives, Committee on International Relations,
Washington, DC, March 5, 2001.
Hon. JESSE HELMS,
Chairman, Senate Committee on Foreign Relations, Washington, DC.

DEAR CHAIRMAN HELMS:
I am strongly supportive of Section 1310 of S. 420, the Bankruptcy Reform Act of 2001, and I seek your support of this provision as well. It is important that this provision remain in the Senate bill and not be stricken.

This provision is necessary to allow American investors who believe they may have been defrauded by Lloyd's of London an opportunity to be heard in American courts. [Page: S2356] GPO's PDF Section 1310 is narrowly drafted to address the unique circumstances facing those Americans who were recruited in the United States to invest in Lloyd's before 1994 without full disclosure that they would be saddled with asbestos liabilities. The English court which rendered summary judgments in favor of Lloyd's and against the American investors denied those investors the right to assert fraud as an affirmative defense. Section 1310 provides a measured remedy in these cases, where, by clear and convincing evidence, the burden of proof is on the American investor to assert and prove fraud. As you are probably aware, a number of Members and Senators on both sides of the aisle, as well as the Securities and Exchange Commission have endeavored to give the Americans who believe they have been defrauded by Lloyd's legal forum in American courts with respect to the representations that were made to them in this country by Lloyd's and its agents. (See attached copy of the Commission's letter to Chairman Oxley)

The provision does not impact state regulation of insurance and it does not violate any treaty obligations of this country. Consistent with the Hague Convention, recognition of a foreign award may be refused if the court in the country where enforcement is sought finds that ``recognition or enforcement of the award would be contrary to the public of that country.'' It is certainly contrary to the public policy of this country for an individual to be defrauded and then denied the right to assert fraud as a defense.

If you have any questions concerning this provision or my support of it, I would be happy to discuss this matter with you.

Sincerely,
HENRY HYDE.

Mr. SESSIONS.
This is a front page copy of Time magazine: Lloyd's of London, 1688--? Its watchword is utmost good faith. So why does Lloyd's stand accused of the greatest swindle ever?

I was a Federal prosecutor for 12 years in Alabama. I was also in litigation. I am personally aware that there is fraud in big insurance companies. I had the opportunity and the responsibility to prosecute perhaps the largest insurance fraud case in the history of the United States that had even been investigated by committees here in the Senate. In that case, people were defrauded out of over $50 million-plus. The guy who did that, Alan Teal, was convicted. It just so happened he had previously, years before, been a member of Lloyd's. That has nothing to do with this, but I relay it here to let you know that I understand insurance fraud and I have been involved in prosecuted the big cases.

In addition, I was involved in asbestos litigation in the late 1970s. I know in the late 1970s there were thousands of asbestos cases being filed, tens of thousands were being filed, and more were on the way. Everyone knew it. Plaintiffs were beginning to win tremendous verdicts. Everybody who knew anything about the litigation wondered if there would ever be enough money to pay those verdicts.

During this same period of time, the companies that had the guaranteeing of the insurance, the reinsurance, was Lloyd's of London. What did they do? They were sending representatives to the United States, asking those people to invest hundreds of thousands of dollars of their own money into these accounts, and they told them: People have done well investing in Lloyd's. We think you will do well. But you are liable for everything that can come up. It is in the fine print. But they invested, thinking Lloyd's had a good reputation. The company began in 1688 with Members of Parliament, with lords and earls as investors in this.

So they invested, little knowing that the bullet was already in the heart, that this company faced absolute financial ruin as a result of the most unprecedented series of lawsuits in American history, asbestos lawsuits.

Now, when this case went to trial, they said they had a trial over there. They passed a securities law in England similar to our securities law, except they exempted one named entity--Lloyd's of London. Many Members of Parliament who passed that law were investors in Lloyd's. I don't know if they recused themselves or not.

These are some of the facts at which we are looking. The heart of the claim is this, that these American investors were not allowed to put on evidence in the British court that omission could lead to liability. In other words, they were not allowed to show under the law under which they were forced to operate, that Lloyd's had any duty to tell them when they were investing in these syndicates, that they were doomed to lose, and there would be money they would have to pay--really, tens of billions of dollars in asbestos claims, enough to ruin all of Lloyd's.

They sold these investments to American citizens, who did not fully know what they were facing. As one said, these were massive, unquantifiable losses that were heading Lloyd's way like a tidal wave, visible only to the few professional insiders who were tracking asbestos claims.

That was a fraud, I think, under any definition of the word.

The British judge, who excluded all evidence except the written documents that were submitted to the investors as the only evidence that went in on the question of fraud, those documents were submitted and they said you could be liable for any claims that may come against Lloyd's, but they did not say this tidal wave of claims was coming.

Up to 7 or more people all over the world, possibly up to 12, have committed suicide as a result of this. It has ruined the lives of many, many citizens.

The judge who tried the case and who was bound by the law so he didn't let this evidence in, said, ``The catalog of failings and incompetence in the 1980s by underwriters, managing agents, members and agents and others is staggering and has brought disgrace on one of the city's great markets.'' He goes on to skewer Lloyd's for their behavior, yet we can't get a remedy.

This says you don't get money as a result, you only go to court and show in a court of law you may have been defrauded.

Mr. President, let me take just a moment to more fully explain the issues involved in this section of S. 420 that we are debating here today.

The Lloyd's of London provision would allow American investors in Lloyd's to defend against debt collection actions by Lloyd's in American courts by attempting to show that Lloyd's defrauded them when it recruited them as investors in the United States. The investors claim that Lloyd's of London recruited them as investors with unlimited liability and without disclosing to them massive impending liabilities for asbestos and pollution losses.

This provision was added in the quasi-conference on the Bankruptcy Bill last year. Republicans and Democrats alike agreed to it.

The provision was in the Bankruptcy bill as introduced and passed by the Judiciary Committee of the House and by the whole House this year. It was in the Bankruptcy Bill as introduced and passed by the Senate Judiciary Committee this year where Senator FEINGOLD mentioned his objections to it.

There are legitimate arguments on both sides of this issue. I have listened to investors, and I have listened to Lloyd's of London. Further, my colleague from Wisconsin has spoken against this provision, and I respect his view.

Lloyd's asserts that an English court has found that Lloyd's, as a corporate entity, was not liable for fraud to several American investors that participated in that trial; that international law and comity among nations demands that we respect the judgment of the English courts;

That the agreements signed by the investors had forum-selection and choice-of-law clauses which provided that any dispute would be litigated in English courts under English law; and

That American courts have upheld the forum-selection and choice-of-law clauses.

On the other hand, the investors contend that Parliament precluded suits against Lloyd's for negligence and breach of contract in 1982 and for securities fraud in 1986; that after the investment contract was signed, Lloyd's changed its by-laws to require investors to pay their losses before asserting fraud as a defense even though many investors can't afford to pay their losses in full!;

That the English court failed to address allegations of fraud that took place in America;

That in 1995 a Colorado court, at the behest of state attorneys working under Gale Norton, issued a preliminary injunction against Lloyd's stating its statements to American investors were ``materially misleading and false because, as a result of underwriting and reinsurance of asbestos-related liabilities in various syndicates, which liabilities had not been disclosed to [investors], those [investors] ..... are exposed to indefinite liability both in terms of amount and duration ..... .'';

That in 1996, Lloyd's settled the fraud claims of numerous State securities regulators by agreeing to reduce its claims against settling investors by $62 million; and

That in the February 26th edition of the Wall Street Journal it was reported that Lloyd's is currently under criminal investigation relating to defrauding its American investors.

In my view, this comes down to a very simple question:

Is this situation egregious enough to warrant an exception to the general rule of comity on judgments?

I believe that it is because of my personal experience as both Attorney General my State and a federal prosecutor.

I prosecuted criminals who defrauded policy-holders and investors.

In 1979, I became aware that insurance companies knew of large asbestos losses discovered in litigation in Pascagoula, Mississippi, and that these losses would be catastrophic to the insurance companies.

I know what it means to a family to be defrauded by an insurance company. It is wrong.

I believe in the sanctity of contract, but there is no contract if the investors were fraudulently induced to enter the investment agreement.

I believe in comity with the British government, but there is no comity if Parliament protects Lloyd's, but Congress does not protect American investors.

I believe that helping wealthy investors should not be at the top of our priority list, but many of these investors are not wealthy and as Time Magazine reported some have even lost their homes to Lloyd's.

I also believe that defrauding investors is intolerable, but that it is possible Lloyd's did not commit fraud.

However, under the current post-contract term that requires the investors to pay before they assert fraud as a defense, investors who cannot afford to pay their loss in full cannot prevent debt collection actions by Lloyd's even if Lloyd's did defraud them.

This amendment says that international comity is a two-way street. The British Parliament cannot protect wealthy British Investors from negligence and securities law claims and expect the American Congress not to at least give American investors a chance to assert fraud as a defense to debt-collection actions--a right that the investors had when they signed their investment contracts but that was unilaterally stripped away from them by Lloyd's after the fact.

Accordingly, I support this narrow provision in the bill to allow pre-1994 American investors to assert fraud as a defense prior to payment. If they cannot prove fraud by clear and convincing evidence, they will lose. If they can prove it, they will win. That is only fair.

Mr. FEINGOLD.
I ask for the yeas and nays on the amendment.

The PRESIDING OFFICER. Is there a sufficient second?
There is a sufficient second.
The question is on agreeing to the Feingold amendment, No. 51, as modified.

The PRESIDING OFFICER. The clerk will call the roll.
The legislative clerk called the roll.

Mr. FITZGERALD (when his name was called).
Present.

Mr. STEVENS (when his name was called).
Present.
Mr. REID.
I announce that the Senator from California (Mrs. BOXER) is necessarily absent. The result was announced--yeas 79, nays 18, as follows:
(Rollcall Vote No. 35 Leg.)

YEAS--79

NAYS--18

ANSWERED ``PRESENT''--2
Fitzgerald
Stevens

NOT VOTING---1
Boxer

The amendment (No. 51), as modified, was agreed to. [And Section 1310 was removed from the Senate version of the bankruptcy reform bill.]