GAO Says Bankruptcy Code Unclear For Financial Cos.

Law360, New York (July 19, 2011, 10:18 PM EDT) -- The U.S. Government Accountability Office on Tuesday reported that the Bankruptcy Code's effectiveness in resolving failed complex financial institutions was unclear due to a lack of evaluation criteria and the complicated nature of the companies' bankruptcy proceedings.

Criteria for judging the effectiveness of the code are not well-developed and the activities and structures of these large financial institutions complicate bankruptcy proceedings, the GAO said. In addition, the fact that so few financial institutions have filed for bankruptcy — and most that have only did so recently...
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