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In common, in the words of a bankruptcy lawyer Jon Schneider of Goodwin Procter in Boston, "There is probably going to be a raft of filings in September to avoid this new law." (Law could trigger Chapter 11 surge) D.J. Baker of Skadden Arps a New York lawyer, representing supermarket chain Winn-Dixie in its reorganization opined that these changes will make some companies to fail in Chapter 11.
James Spryaregen of Kirkland & Ellis in Chicago forecasts that the new rules will make it more stringent to raise sufficient financing in bankruptcy and he visualized more liquidation. The Companies subject to Chapter 11 will only find one and half a year during which the management alone can entail a plan for managing a reorganized company. Presently the Judges can extend exclusivity almost indefinitely, deterring the creditors and external investors from entailing alternative plans to the court. A stringent deadline and possibly a fast return on investments could trigger more external financial interest in restructured companies. It is evident that in the absence of evidence of actual job offers the companies won't be permitted to pay officers bonuses to deter them from leaving the company. To safeguard the landlords...
Presently a bankruptcy judge can frequently extend the deadline. Mitchell Cohen of Gordon Bros Group, a consultant to Kmart during its reorganization, opined that such confinement will compel the retailers into quick decisions, and they may not be the best decisions. Moreover, the Utilities are also permitted to charge the companies big security deposits while they are in Chapter 11. (Law could trigger Chapter 11 surge)
References
Adams, Marilyn. Law could trigger Chapter 11 surge. 11 July, 2005. Retrieved at http://www.usatoday.com/money/companies/management/2005-07-11-bankruptcy-usat_x.htm. Accessed on 23 July, 2005
Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. Retrieved at http://pfp.aicpa.org/Bankruptcy+Abuse+Prevention+and+Consumer+Protection+Act+of+2005.htm. Accessed on 23 July, 2005
Encyclopedia: Bankruptcy. Retrieved at http://www.nationmaster.com/encyclopedia/BankruptcyAccessed on 23 July, 2005
Ginsberg, Jonathan. New Bankruptcy Law Passed on April 20, 2005 - Goes Into Effect on October 17, 2005. Retrieved at http://www.moneylawyer.com/bankruptcy_georgia/new_legislation/new_legislation.html. Accessed on 23 July, 2005
Reimer, Craig E. United States: Congress Overhauls the Nation's Bankruptcy Laws. 21 April, 2005. Retrieved at http://www.mondaq.com/i_article.asp_Q_articleid_E_33224Accessed on 23 July, 2005
New Bankruptcy Law When the next credit card representative comes to campus, trying to market the newest MasterCard or Visa -- run away! Congress has made it more difficult for individuals to declare and extricate themselves from bankruptcy. Although the idea the new bankruptcy legislation is supposed to support, namely that consumers must become more fiscally responsible, may seem neutral on its surface and merely designed to reign in an overspent
It provided for fast proceedings, encouraged debtors to reschedule their obligations rather than liquidate and helped creditors recover their claims against bankrupt estates. The 1994 Act also created the National Bankruptcy Commission, charged with investigating further modifications of the bankruptcy law. Latter laws, however, disregarded many of the Commission's recommendations. In April 2005, President George W. Bush signed the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. Many
Similarly, establishing payment plans with vendors may help reduce monthly costs and free up extra cash. The benefit of such restructuring is that it would allow the company to avoid the highly invasive Chapter 11 process, where there is a loss of control as creditors and a court get to weigh in on company operations. The downside of debt restructuring is that Interstate would still have to pay its
Interest rates will be lowered reaching 3.4% in 2011 and borrowers won't have to begin repayments until they are making about $15,000." (Education Portal, 2007) Furthermore, the effectiveness of this bill is questioned because after 2011 interest rates will quickly climb on these loans again. The work entitled; "Student Loan Lenders Creating a New Credit Bubble" states of investors, that they are: "...clamoring to purchase bundled student loans. According to
Off-duty time does not extend the 14-hour period. 15-Hour on-Duty Limit May not drive after having been on duty for 15 hours, following 8 consecutive hours off duty. Off-duty time is not included in the 15-hour period. 60/70-Hour on-Duty Limit May not drive after 60/70 hours on duty in 7/8 consecutive days. A driver may restart a 7/8 consecutive day period after taking 34 or more consecutive hours off duty. 60/70-Hour on-Duty Limit May not
Sometime the debtor is able to successfully reduce its liability and returns to profitability but quite often it returns to seek the court's protection again and sometime the end result is liquidation. Under Chapter 11 protections, the debtor gets an automatic protection from all creditors. The unsecured creditors cannot lay a claim on assets and secured creditors are also prevented from foreclosing on their collateral. A Chapter-11 company also gets