An interdisciplinary group of bankruptcy scholars from the “Large Corporations Committee of the Bankruptcy & COVID-19 Working Group” recently sent an open letter to the United States Senate/House of Representatives on the potential impact of a sharp rise in bankruptcies on the bankruptcy court system. In the letter, the bankruptcy scholars pointed to the deteriorating market for corporate debt and the rising unemployment rate as likely to induce increased bankruptcies in the next months. If the economy does not prepare, the level of demand on the bankruptcy court system could become overwhelming. Accordingly, the scholars urge Congress to start planning and create additional resources to support the existing court system, such as adding temporary bankruptcy judges, recalling of retired judges, and moving judges from less-busy districts to busier districts.
The full letter can be found here.