House Judiciary Committee to Hold Hearing on Chapter 11 of the Bankruptcy Code
Washington, D.C. – On Wednesday, March 26th at 4:00 p.m., the Subcommittee on Regulatory Reform, Commercial and Antitrust Law will hold an oversight hearing on “Exploring Chapter 11 Reform: Corporate and Financial Institution Insolvencies; Treatment of Derivatives.” The hearing will allow the Subcommittee to review Chapter 11 of the Bankruptcy Code and discuss whether reforms are necessary to ensure that the bankruptcy process is utilized effectively.
Chapter 11 of the Bankruptcy Code allows companies and individuals to restructure their liabilities through a court-supervised process. The American Bankruptcy Institute has organized a collection of premier bankruptcy professionals, academics, judges, and trustees to conduct a comprehensive review of Chapter 11. The hearing will allow the Subcommittee to receive testimony regarding this review.
Additionally, the hearing will allow the Subcommittee to hear testimony regarding the issue of amending Chapter 11 to better address the insolvencies of financial institutions, and to review existing safe harbors for certain financial contracts. The hearing will allow for further discussion and development of certain issues examined during the Subcommittee’s December 3, 2013 hearing on “The Bankruptcy Code and Financial Institution Insolvencies.”
House Judiciary Committee Chairman Bob Goodlatte (R-Va.) and Subcommittee Chairman Spencer Bachus (R-Ala.) released the statements below on the hearing.
Chairman Goodlatte: “Since nearly the inception of bankruptcy laws in the United States, the House Judiciary Committee has played a central role in developing and shaping bankruptcy law. In fact, the Bankruptcy Code that exists today was drafted by this Committee. Chapter 11 of the Bankruptcy Code is a central feature of our bankruptcy laws and plays a fundamental role in our economy.
“This Committee has consistently exercised its oversight and legislative powers to ensure that bankruptcy issues are properly addressed. Today, the witnesses will examine Chapter 11 of the Bankruptcy Code and the use of safe harbors to see whether improvements need to be made. I look forward to hearing their testimonies.”
Subcommittee Chairman Bachus: “An integral component of the American economy is the ability of companies to turn to Chapter 11 of the Bankruptcy Code to overcome unexpected financial troubles. These companies may use Chapter 11 to restructure their debt obligations while continuing their business operations, which preserves jobs and increases the value returned to the companies’ creditors, suppliers, customers, and the American economy.
“Given the constantly developing law and related practices, it is important that the Committee undertake a periodic review of the application of Chapter 11 and related issues.”
Witnesses for the hearing include:
- The Honorable Christopher Sontchi, U.S. Bankruptcy Court for the District of Delaware;
- Mr. Seth Grosshandler, Esq., Partner, Cleary Gottlieb Steen & Hamilton LLP;
- Ms. Jane Vris, General Counsel and Partner, Millstein & Co.;
- Professor Thomas H. Jackson, William E. Simon School of Business, University of Rochester; and
- Professor Michelle M. Harner, Reporter for the ABI Commission to Study the Reform of Chapter 11, Co-Director, Business Law Program, University of Maryland Francis King Carey School of Law.