The ABI Commission to Study the Reform of Chapter 11 released its final report today containing recommendations for modernizing the Bankruptcy Code for chapter 11 business reorganizations. “Chapter 11 works to rehabilitate companies, preserve jobs, and provide value to creditors only if distressed companies and their stakeholders actually use the chapter 11 process to facilitate an in-court or out-of-court resolution of the company’s financial distress,” according to the Commission’s final report. “Chapter 11 in turn needs to offer tools to resolve a debtor’s financial distress in a cost-effective and efficient manner.” Funded by ABI and the Anthony H.N. Schnelling Endowment Fund, the Commission’s final report incorporates the recommendations of the Commission’s 13 advisory committees, which examined key issues in corporate bankruptcies and presented testimony at 17 public hearings held between 2012 and 2014. More than 130 other leading experts participated on topical advisory committees to thoroughly study chapter 11 practice in the most comprehensive study of its kind in more than a decade.
