In time for the Christmas holidays the American Bankruptcy Institute (ABI) has released (8 December 2014) a 400-page report titled Commission to Study the Reform of Chapter 11, 2012-2014, Final Report and Recommendations.
The ABI [**] is a bit like the Australian Reconstructing Insolvency & Turnaround Association (ARITA), only much larger. On its website it’s described as follows:
“The American Bankruptcy Institute is the largest multi-disciplinary, non-partisan organization dedicated to research and education on matters related to insolvency. ABI was founded in 1982 to provide Congress and the public with unbiased analysis of bankruptcy issues. The ABI Canal Center Plaza membership includes more than 13,000 attorneys, auctioneers, bankers, judges, lenders, professors, turnaround specialists, accountants and other bankruptcy professionals providing a forum for the exchange of ideas and information. In fulfillment of its mission to provide information to its members, journalists, Congress and the public, ABI is engaged in numerous educational and research activities, as well as the production of a number of publications both for the insolvency practitioner and the public.”
This is an extract from the Introduction to the ABI’s report:
“A robust, effective, and efficient bankruptcy system rebuilds companies, preserves jobs, and facilitates economic growth with dynamic financial markets and lower costs of capital. For more than 35 years, the U.S. Bankruptcy Code has served these purposes, and its innovative debtor in possession chapter 11 process, which allows a company to manage and direct its reorganization efforts, is emulated around the globe. As with any law or regulation, however, periodic review of U.S. bankruptcy laws is necessary to ensure their continued efficacy and relevance …. Markets and financial products, as well as industry itself, often evolve far more quickly than the regulations intended to govern them. It may be that significant economic crises tend to occur cyclically and encourage reevaluation of the federal bankruptcy laws. Regardless, the general consensus among restructuring professionals is that the time has come once again to evaluate U.S. business reorganization laws.”
Despite the ABI’s report being mainly about Chapter 11 – i.e., the US law which permits a corporation or other entity to propose a plan of reorganization (debtor in possession) to keep its business alive and pay creditors over time – it seems to me that Australian insolvency law enthusiasts will find its discussion and analysis invaluable. Seriously.
A pdf copy of may be downloaded from the ABI site.
[**] As we all know, in America the term “bankruptcy” refers to corporate insolvency as well as personal insolvency.