ABI Commission to Study the Reform of Chapter 11
I. Introduction 3
The Commission adopted a holistic and inclusive approach to its study and was guided by its mission statement, which reads:
In light of the expansion of the use of secured credit, the growth of distressed-debt markets and other externalities that have affected the effectiveness of the current Bankruptcy Code, the Commission will study and propose reforms to Chapter 11 and related statutory provisions that will better balance the goals of effectuating the effective reorganization of business debtors — with the attendant preservation and expansion of jobs — and the maximization and realization of asset values for all
creditors and stakeholders.
In furtherance of its mission statement, the Commission undertook an in-depth three-year study process. The study focused exclusively on the resolution of financially distressed businesses under chapter 11 of the Bankruptcy Code.2 This Report explains the components of the Commission’s study process, summarizes the results of the study, and presents the Commission’s resulting recommendations for reform in a series of principles organized generally by issue and sequence in the chapter 11 process.
Although the Commission designed its three-year process around concepts of inclusiveness, diversity of thought, leadership, and transparency, the Commission, working with the Commission’s Reporter, Professor Michelle M. Harner, University of Maryland Francis King Carey School of Law, maintained exclusive control over the substance of the final Report. All decisions and recommendations set forth in the Report were made solely by the Commissioners in accordance with the voting procedures described herein. The Reporter worked closely with the Commissioners to draft the language of the recommended principles and the supporting narrative for each of those principles. Although the Reporter acted as the principal draftsperson of the Report, the Commissioners reviewed and commented on various iterations of this Report to achieve this final product. The Commission voted unanimously to adopt this Report on December 1, 2014. During the three-year study and the drafting process, the Commission was assisted in its research by Leah Barteld Clague, Jennifer Ivey-Crickenberger, and Sabina Jacobs, as well as each of the Commission’s advisory committees and their respective reporters. The Commission appreciates the assistance of all of these individuals, and acknowledges the substantial value added to this Report by the work of the advisory committees and the international working group.3
2 The Commission did not address issues unique to the resolution of an individual debtor’s financial distress under chapter 11. For a general discussion of these issues, see Section IX.C, Individual Chapter 11 Cases. 3 Additional information regarding the Commission’s research assistants and the empiricists who assisted with research underlying the report are identified at Appendix B. Members of the advisory committees are listed at Appendix C, and members of the international working group are listed below, infra note 53. In addition, this Report also benefited from datasets made available to the Commission by New Generations, UCLA-LoPucki Bankruptcy Research Databases, and the Loan Syndications and Trading Association.