Commission Recommendations Create More Certainty for All Parties in Chapter 11, According to April ABI Journal Article

Commission Recommendations Create More Certainty for All Parties in Chapter 11, According to April ABI Journal Article



April 13, 2015 Alexandria, Va. — The Final Report of ABI’s Commission to Study the Reform of Chapter 11 identified more than 30 splits in case law on important chapter 11 issues. While it did not reach a consensus resolution on every split or ambiguity, it was able to recommend principles that would help provide certainty to all parties in a chapter 11 case, according to the lead article in the April edition of the ABI Journal. “Regardless of the cause, uncertainty in the interpretation of chapter 11 results in delay and increased costs for, and may permit strategic gamesmanship by, debtors and creditors alike,” write Commission Reporter Prof. Michelle Harner and J.D. candidate Marc Salvia of the University of Maryland Francis King Carey School of Law in their article “ABI Commission: Creating More Certainty in Chapter 11 for All Parties.”


Harner and Salvia highlight a few of the case law splits that the Commission recommendations would fix, including:


  • the treatment of claims arising from the rejection of a collective bargaining agreement;
  • the definition of “executory contract”;
  • the effect of rejecting an executory contract or unexpired lease under § 365;
  • the treatment of trademark licenses generally;
  • the debtor’s ability to sell assets free and clear of claims, as well as liens and interests;
  • the fiduciary duties of professionals paid from the estate; and
  • the burden of proof for fraudulent transfer actions.


“Resolving ambiguity under the case law would be a strong first step toward a more efficient and effective federal restructuring scheme,” Harner and Salvia write. “It may also mitigate the forum selection and cost concerns often voiced in the contest of chapter 11.”


To obtain a copy of “ABI Commission: Creating More Certainty in Chapter 11 for All Parties,” published in the April issue of the ABI Journal, please contact John Hartgen at 703-894-5935, or via email at [email protected]


You can find the full recommendations submitted to Congress by the ABI Commission to Study the Reform of Chapter 11 at


Prof. Harner and members of the Chapter 11 Reform Commission will be participating on panels at ABI’s 33rd Annual Spring Meeting:


Friday, April 17:

  • “How Secured Are Secured Creditors? The Changing Landscape of Chapter 11 Plan Confirmation” session 10:15-11:45 a.m. ET.

Panel to review and analyze § 1129(a) and (b) confirmation standards focused on recent developments affecting senior and junior secured creditors, including the ABI Commission Report.


  • “Report from the ABI Commission to Study the Reform of Chapter 11” session, 2:15-3:45 p.m. ET.

Panel to present key findings as submitted to Congress, with several members of the Commission and the official reporter.


  • “Secured Credit Under the Code and Commission Report” committee session, 4:15-5:45 p.m. ET.

Experts from ABI’s Secured Credit and Legislation Committees, along with congressional staff, will be examining secured credit under the Code and the recommendations of the Commission Report.


Saturday, April 18:

  • “Reconsidering Safe Harbors for Repurchase Agreements” session, 2:15-3:45 p.m. ET.

Panel to explore the “safe harbor” agreements in bankruptcy, and arguments for and against revising the Bankruptcy Code’s existing treatment of these agreements.


Sunday, April 19:

  • “Ethics: Chapter 11 Commission Recommendations on Professional Fees and Expenses” session, 10:15-11:45 a.m. ET.

Panel of Chapter 11 Reform Commissioners will discuss recommended reforms that provide for more effective oversight, as well as alternative fee structures consistent with professionals’ ethical obligations under the Code of Professional Responsibility.


Reporters looking for more information on these panels or who want to attend the Annual Spring Meeting should contact ABI Public Affairs Manager John Hartgen at 703-894-5935 or [email protected]



ABI is the largest multi-disciplinary, nonpartisan 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 membership includes more than 12,000 attorneys, accountants, bankers, judges, professors, lenders, turnaround specialists and other bankruptcy professionals, providing a forum for the exchange of ideas and information. For additional information on ABI, visit For additional conference information, visit