Treasury Recommends OLA And Bankruptcy Reforms

The U.S. Department of the Treasury ("Treasury") published a report pursuant to President Donald J. Trump's memorandum directing Treasury to evaluate the Orderly Liquidation Authority ("OLA") and propose reforms. The OLA is a mechanism adopted by Congress (pursuant to Dodd-Frank Title II) for resolving large, complex financial institutions where resolution through bankruptcy would pose unacceptable systemic risks to the U.S. economy. Treasury made a number of recommendations for (i) adopting a new specialized chapter of the bankruptcy code to reduce the likelihood of needing to resort to OLA and (ii) reforming the OLA resolution process.

Treasury recommended the following reforms under the Bankruptcy Code: