Bankruptcy Courts – Plenty of Chutzpah To Get the Debtor Out – But Later, Not So Much
Chapter 11 bankruptcy courts never cease to amaze. Until the debtor is out of chapter 11, they claim immense power. Thus, this post from the Weil bankruptcy blog describes a case in which the court decided to order the terms for a contract so that the debtor could exit bankruptcy.
On the flip side, once the debtor is off and running, the bankruptcy courts often are modest in their assertions of power. For example, they let asbestos bankruptcy trusts run wild and do more or less whatever they please.
The chapter 11 bankruptcy code terms and "common law" bankruptcy rules are a disaster when it comes to mass torts. One wonders if reform will ever happen.