Originally published in ABL Advisor on 1/15/2013.
As co-chairs of the American Bankruptcy Institute’s Commission to Study the Reform of Chapter 11 (ABI Commission), we are proud to note that the ABI Commission is entering its second year of operation. Thus, it is an appropriate time to reflect on the reasons for the formation of the ABI Commission, its mission, its activities over the prior year, what it has learned, and its course for the future.
Why the Need for Reform … And Why Now? It has been over thirty years since the Bankruptcy Code was enacted, and a consensus has emerged that the current law needs an overhaul. The 1978 Bankruptcy Code, as it has been amended on numerous occasions, has served us well for years. Some would contend that the 1978 Bankruptcy Code offered a balance between creditor and debtor interests, establishing what was often described as a “level playing field” for restructurings. When first enacted, supporters of the 1978 Bankruptcy Code argued that it served the interests of all those impacted by a debtor in distress including employees, the surrounding community, the public interest and creditor interests but did so in a flexible way that balanced all interests while meeting the debtor’s goal of succeeding in saving its business.
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