The “Resolution Project” began in August 2009, in the midst of the financial crisis, to consider how best to deal with the failure of major financial institutions. The members of the group, assembled from institutions across the country, were Andrew Crockett, Darrell Duffie, Richard Herring, Thomas Jackson, William Kroener, Kenneth Scott (chair), George Shultz, Kimberly Summe and John Taylor, later joined by David Skeel. The heated debate in Congress over the proper response continued until July 2010, culminating in the Dodd-Frank Wall Street Reform and Consumer Protection Act (Pub. L. 111-203), which in Title II established a new procedure whereby systemically important financial institutions could be put into an FDIC receivership.
The Resolution Project group turned to the development of a supplemental proposal for a modified bankruptcy law, denominated as a new Chapter 14, designed exclusively for major financial institutions. This paper is written for a moderately knowledgeable audience and is intended to identify and compare the major differences in the Dodd-Frank Title II and Chapter 14 procedures, and to outline the reasons why the group believes the latter to be preferable.