The bankruptcy laws of the United States have a rich history, stemming in significant part from the railroad failures of the late 19th century, and the Great Depression of the 1930s. In 1970, Congress established a “Commission on the Bankruptcy Laws of the United States” to study and recommend changes to the Bankruptcy Act of 1898. Based in part on that Commission’s recommendations, Congress enacted the 1978 Bankruptcy Code, which remains largely in place today.
In 1994, Congress established the National Bankruptcy Review Commission (the “NBRC”) to take another look at studying and reforming the Bankruptcy Code. The NBRC issued its report in 1997, and several of its recommendations were accomplished in varying degrees in the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005.
In 2011, the American Bankruptcy Institute established a Commission to Study the Reform of Chapter 11 (the “ABI Commission”). The commissioners include many prominent insolvency and restructuring professionals. Last month, the ABI Commission issued its report, which it hopes will lead to “spirited debate on the issues.”
We have published an article in the current issue of Business Money magazine summarizing certain key recommendations of the ABI Commission of particular interest to lenders. Keep in mind the ABI Commission was not established by Congress, and the ABI Commission’s report does not effectuate any changes to the Bankruptcy Code. However those who may be impacted by the Commission’s recommendations, if they were to become law, may wish to organize teams to further develop policy arguments in support of or against the recommendations.
