Some businesses seeking reorganization may have less complicated reorganization plans and may opt to use the expedited provisions. One of the best aspects of Chapter 11 is that it was originally established to provide flexibility. Flexibility is needed not only with respect to the type of bankruptcy relief being sought but also based upon the different industries seeking bankruptcy protection and in the different ways businesses operate in various regions of the country. I believe that the same principle applied here could quantify and identify the precise problems of small business bankruptcy reorganizations and the appropriate measures to make Chapter 11 work more efficiently and effectively. In addition, many very small businesses have no prior experience with the bankruptcy system.
Flexibility is needed to ensure that the debtors are properly educated about the process.
Several bankruptcy courts around the country have found solutions to expedite the process while retaining flexibility. These local initiatives have been able to take into account the complexity of the bankruptcy, the nature of the industry of the debtor and any regional economic impacts. HR 3150 would eliminate vital judicial discretion now permitted by the U.S. Bankruptcy Code. I believe that the changes proposed in the bill are of such immense proportion that further discussion is needed to address the full impact of the proposals on entrepreneurship, the small business community and our national economy. As the Bankruptcy Review Commission acknowledged in its Small Business Proposals, existing data on bankruptcies is poor.