Ending Corporate Bankruptcy Abuse: Protecting Victims of Mass Liability Claims.
This law makes it harder for large corporations to use bankruptcy to shield assets from mass liability claims, such as those related to environmental damage or defective products. It allows courts to quickly dismiss bankruptcy filings deemed futile or made in bad faith, especially if the goal is to delay creditors or gain a legal advantage. Crucially, victims of mass harm can continue lawsuits against related, solvent companies even if the main entity files for Chapter 11.
Key points
Courts gain power to dismiss corporate bankruptcy cases filed in "bad faith," such as those intended to cap liability for mass tort victims.
Victims of mass claims (e.g., product liability, contamination) can pursue lawsuits against non-bankrupt affiliates if the debtor recently underwent corporate restructuring.
A strict 24-month deadline is imposed for companies to confirm a reorganization plan under Chapter 11 bankruptcy.
Status:
Expired
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