The Great Recession in the U.S., which began around 2008, caused numerous company failures. There were, however, some large, complex private-sector companies that the U.S. government deemed “too big to fail.” These too-big-to-fail financial companies, such as Bear Stearns and American International Group, Inc., were bailed out by the federal government using taxpayer money. With the goal of preventing future government (taxpayer) bailouts and to protect the stability of the U.S. financial system, Congress passed reform legislation, including the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”).

Over the years, Congress and regulators have sought to fine-tune Dodd-Frank and other laws and regulations precipitated by the Great Recession. This article discusses the U.S. Treasury’s recent recommendations to the U.S. President regarding a new chapter 14 bankruptcy regime and other bankruptcy reforms related to the orderly liquidation of large, complex, financial companies that are systemically important to the U.S. financial system.

At this year's Annual Spring Meeting in Washington, D.C., the Legislation Committee paired with the Commercial Fraud Committee to host a session titled A Primer on the Uniform Voidable Transactions Act: Substance, Implementation, and Legal Interpretation. Speakers for this session included: 

• Leanne Gould  -  Gould Consulting Services; Atlanta
• Christopher A. Jones  -  Whiteford Taylor Preston LLP; Falls Church, VA
• Prof. Kenneth C. Kettering  -  Brooklyn Law School; New York
• Erika Lynn Morabito  -  Foley & Lardner LLP; Washington, D.C.
• Thomas R. Walker  -  McGuireWoods LLP; Atlanta

Robert J. Keach of Bernstein, Shur, Sawyer & Nelson, P. A. (Portland, Maine) and co-chair of ABI's Commission to Study the Reform of Chapter 11 testified on March 7 before the Senate Judiciary Subcommittee on Oversight, Agency Action, Federal Rights and Federal Courts. During the hearing titled "Small Business Bankruptcy: Assessing the System," Keach proposed legislation based on the Commission's recommendations to provide a viable option for small and medium-sized enterprises (SMEs) looking to reorganize under the Bankruptcy Code. “The bill is not just a ‘small business’ bankruptcy bill for the tiniest firms; the proposed restructuring option would apply to approximately 90 percent of all business filers by number,” according to Keach’s testimony. To read Keach's prepared hearing testimony and review the proposed legislation, please click here.