There are some major shifts taking place in regulations surrounding Chapter 11 bankruptcies, changes that could significantly benefit claimants in sex abuse cases. Most notably, the Boy Scouts of America, which filed for Chapter 11 bankruptcy protection in the District of Delaware in February 2020, had a reorganization plan confirmed after facing an unprecedented volume of abuse claims, more than any other bankruptcy case has dealt with previously.
The way these types of claims are handled in Chapter 11 cases could be changing in the near future, thanks to a potential new bill in Congress. The proposed law takes aim at these cases directly, in an attempt to address the notable and ongoing issues related to them. This legislation promises to shift significantly the balance of power in Chapter 11 cases, thereby offering a potentially greater level of protection and potentially more power for the claimants involved in abuse lawsuits.
Unfortunately, it is important to note that, though it appears the proposed bill could result in substantial and much-needed changes, the specifics of the proposed law itself are not yet fully clear. Equipped with this knowledge, legal professionals are encouraged to stay informed and closely monitor this situation as it develops further. For more thorough analysis, you may refer to this detailed report on the issue.