As a follow up to my earlier post about the forces that have made bankruptcy less workable for reorganizations, I note a new Businessweek article. Retailers are feeling the pain of reduced consumer spending and tough credit terms, and now they are discovering that the 2005 bankruptcy amendments will make it harder–or impossible–for some of them to reorganize.
In an article entitled, When Chapter 11 is the End of the Story, reporters have started interviewing failing retailers who are facing new hurdles because of the changes in the law. The conclusion? Companies that might have reorganized before 2005 may now be pushed into liquidation.