Congressman Cohen to Chair Subcommittee Hearing on Bankruptcy Law Today

The hearing will examine – in light of the 2005 amendments to Chapter 11 of the Bankruptcy Code and other developments – whether Chapter 11 is working as Congress intended. As part of this examination, the hearing will focus on the recent Chapter 11 filing by Circuit City Stores. In less than four months after filing its chapter 11 case, Circuit City has closed all of its store locations in the United States and terminated approximately 34,000 employees.

We are in the midst of an economic maelstrom that’s hurting virtually every sector of our economy,” said Congressman Cohen. “When businesses encounter financial distress, they may, as a last resort, file for bankruptcy relief under Chapter 11. This is intended to give companies a temporary cooling-off period that is designed to benefit everyone. The goal of Chapter 11 is to give businesses at least a fighting chance to reorganize so that they can re-enter the marketplace and save jobs. Some of us fear, however, that Chapter 11 is no longer working as Congress intended it to, especially in light of the 2005 Amendments to the Bankruptcy Code. Today, we’ll examine how changes in the mechanics of the bankruptcy code aren’t giving businesses a fair shot to survive during a down economy.”

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Contact:
Marilyn Dillihay, Press Secretary, 202-225-3265
Charlie Gerber, Communications Assistant, 202-225-3265