Federal Watchdog Wants to Put Brakes on High-Speed Bankruptcies

The Justice Department’s bankruptcy watchdog is sounding the alarm over several recent “pre-packaged” Chapter 11 cases that take only days, or even hours, from start to finish.

Some recent bankruptcies in particular have wrapped up very quickly. Retailer Belk Inc.'s 16-hour case in February set a record, while shale oil driller HighPoint Resources Corp.'s case concluded in March within four days of filing.

These rapid-fire cases, which ostensibly are supposed to be reserved for extraordinary circumstances, are renewing concerns about fairness to creditors and transparency in the bankruptcy process.

“Pre-packaged plans offer a means of expediting the bankruptcy process ...