Proposed “Too Big to Fail” Amendments to the Bankruptcy Code

December 02, 2009
The Consumer Protection and Regulatory Enhancement Act of 2009 recently proposed in the House of Representatives would amend the Bankruptcy Code to deal with the adjustment of debts and liabilities of non-bank financial institutions that are deemed “too big to fail.” The Act would also create a new chapter 14 to the Bankruptcy Code to govern such bankruptcies. This update examines the Act and how, if enacted, it would significantly alter how the insolvency, failure, and bankruptcy of a non-bank financial institution is handled.