Larry Rulison Staff Federal bankruptcy reform legislation making its way through Congress may lead to more small business failures in Greater Baltimore, legal and business experts say. A main provision of the House version forces small businesses using Chapter 11 bankruptcy protection to file a reorganization plan with the bankruptcy court within six months.
Current rules impose no deadline.
Although the legislation has the support of business interests and President George W. Bush, small business owners in Baltimore, such as Canby Motors President Mark Canby, say the changes could spell trouble for small businesses trying to stave off creditors. Canby should know. His company successfully emerged from a year-long Chapter 11 reorganization in October. And instead of shutting down his business during the reorganization, he just scaled it back. But for companies with serious flaws in their business plans, Canby thinks the proposed six-month deadline is too short.