Consumer Protection and Corporate Accountability in Bankruptcy Act of 2026

Key Provisions

• Allows courts to dismiss Chapter 11 bankruptcy cases that are pointless or filed in bad faith.
• Creates strong rules that assume bad faith if a company tries to use bankruptcy to gain a legal edge, delay creditors, or limit payments to creditors it can afford to pay.
• Assumes bad faith if a company filed for bankruptcy within 4 years of a major corporate change, like a merger or spinoff.
• Assumes bad faith if a company transferred significant assets to insiders or related companies within 4 years before filing for bankruptcy.
• Lets people pursue claims against companies related to a bankrupt business, even if the main company is in bankruptcy, especially after recent corporate changes.