David L. Pollack, a Ballard Spahr real estate partner with more than 25 years of experience representing landlords in retail bankruptcy matters, recently testified at a hearing before an American Bankruptcy Institute (ABI) panel that is studying ways to overhaul Chapter 11.

The ABI’s Commission to Study the Reform of Chapter 11 is undertaking the first comprehensive review of the federal Bankruptcy Code since it was enacted more than 30 years ago. The Commission has indicated that a review is needed in light of the expansion of the use of secured credit, the growth of distressed-debt markets, and other factors that have affected the Code’s effectiveness.

Mr. Pollack, who focuses on commercial leasing and other matters relating to shopping centers, testified on June 4 at a field hearing at the New York Institute of Credit in New York City as part of a panel of witnesses addressing executory contracts and leases. He told the Commission there is a misconception that certain changes to the Code that were adopted in 2005, such as a 210-day deadline for debtors to assume or reject commercial leases after filing for bankruptcy, have resulted in more retail business failures.

“History shows numerous examples of retail debtors reorganizing under Chapter 11 and subsequently failing, even before the Code was amended in 2005. Economic conditions, merchandising, consumer attitudes, and financing all need to be examined as contributing factors in those instances,” Mr. Pollack said. “I’m hopeful that our input into the Commission’s review of Chapter 11 will help provide a more balanced view of retail bankruptcy cases.”

Mr. Pollack previously led Ballard Spahr’s Bankruptcy, Reorganization and Capital Recovery Group. He also serves as Chair of the International Council of Shopping Centers’ Bankruptcy Task Force.

The June 4 field hearing is among a series of hearings the Commission is holding across the nation. A video recording of the hearing and Mr. Pollack’s statement to the Commission are available on the Commission’s website.

Related Practices

Bankruptcy, Reorganization and Capital Recovery
Distressed Real Estate
Leasing
Real Estate