Consumer Protection and Corporate Accountability in Bankruptcy Act of 2026

Increased Accountability for Bad Faith Filings: The bill allows for the dismissal of cases that are determined to be objectively futile or filed in subjective bad faith (Section 2).

Prevention of Tactical Litigation and Delays: The bill creates a conclusive presumption of bad faith if a filing is intended to gain a tactical litigation advantage or impose undue delay upon creditors (Section 2).

Protection Against Capping Liabilities: The bill targets filings intended to cap the total amount of liability a debtor owes to two or more creditors holding protected claims, provided the debtor has sufficient property to pay them (Section 2).

Addressing Corporate Restructuring Issues: The bill creates presumptions of bad faith if a debtor was subject to a divisional merger or similar transaction changing the corporate structure within four years prior to the filing (Section 2).

Protection for Specific Claims: The bill defines "protected claims" which include claims affecting not less than 100 individuals and relating to injury, contamination, damage, or loss caused by products, materials, or substances (Section 4).

Increased Burden of Proof on Debtors: In determinations regarding bad faith under certain subsections, the burden of proof is placed on the debtor (Section 2).

Strict Standards for Rebutting Presumptions: A presumption of bad faith regarding manufactured venues can only be rebutted using clear and convincing evidence (Section 2).

Limitations on Judicial Authority: The bill prevents courts from issuing orders, processes, or judgments that have the purpose or effect of overriding or nullifying certain stay provisions (Section 3).