Judicial shortage could mean delays in bankruptcy cases

The nation’s bankruptcy courts are facing a substantial decrease in the number of judges available even as personal and corporate filings remain high, according to The Wall Street Journal. In order to combat the judicial shortage, lawmakers established a temporary judgeship program to provide bankruptcy courts with additional judges. However, the program will end soon unless Congress votes to extend its lifespan, at an estimated cost of $16 million. If Congress does not approve an extension for the program, judicial workloads would increase substantially, with the potential to become unmanageable in some instances.

The consequences would not be limited to increasingly strained judges; timely rulings and the flexibility to schedule hearings on short notice are crucial for both individuals and businesses involved in bankruptcy or related proceedings. The Journal cites Kodak as a case in point, noting that, on the same day as its initial Chapter 11 filing, the company was able to obtain some of the $950 million in bankruptcy loans it needed in order to continue day-to-day operations. If a judicial shortage goes unaddressed, businesses in similar situations may be out of luck.

The full report can be found here.