Last week, landlords and retailers moaned as the U.S. House of Representatives voted against H.R. 333, a bankruptcy reform bill that would make it harder to file Chapter 11. But the motivations of the two groups were quite different.

Retailers, represented by the National Retail Federation (NRF) and other lobbying groups, had launched a six-year campaign in support of bankruptcy reform. According to NRF, U.S. retailers lose billions each year to skyrocketing consumer bankruptcies, which reached another record in 2002. "Bad debts from bankruptcy hurt retailers whether they run their own credit card programs or just accept credit cards," said NRF president and CEO Tracy Mullin in a prepared statement. "I can’t recall a single piece of legislation our industry worked so hard on to have it go down in defeat."

Retail landlords, represented by the International Council of Shopping Centers (ICSC) and other lobbying groups, supported the bill because it would have standardized the time period bankrupt tenants have to assume or reject a lease to 120 days. Landlords complain that bankrupt retailers hurt their centers’ business by taking too much time to decide whether to reject or continue leases at closed stores.

A group of CEOs including Sears Roebuck’s Alan Lacy, Federated’s James Zimmerman and Target Corp.’s Bob Ulrich, wrote a letter to House leaders urging approval of H.R. 33. But Conservative Republicans opposed the bill because of wording that would prevent the discharge in bankruptcy of debts of people who perpetrate violence at abortion clinics and other public facilities. "This is an issue with significant economic implications that got lost in the controversy over abortion," Mullin said. "An extraneous, tangential issue should never have been allowed to derail legislation this important to the nation’s economy."

Will retailers and shopping center landlords continue to fight for bankruptcy reform despite the recent defeat? "A lot of the groups that have been working so hard on this bill have lost their stomach for it," Mullin said. "We need to let some time pass before we decide what to do next."