Top restructuring professionals say that U.S. corporate bankruptcy law is broken and are pushing lawmakers for changes that would give struggling companies a better shot at survival, The Wall Street Journal reported today. In the report, industry professionals called on federal lawmakers to pass reforms that they say would make the chapter 11 process cheaper and more efficient, potentially saving jobs and stabilizing the economy. The 400-page report from ABI’s Commission to Study the Reform of Chapter 11 describes how federal lawmakers could restore protections that have eroded since the last major overhaul of corporate reorganization law in 1978. The proposed changes to the law could make chapter 11 cheaper and simpler for small businesses, which would have access to a new restructuring advisor and no longer have to pay for an expensive committee of creditors in most cases. It would also make it easier for small-business owners to hold on to their companies.
