NEW DEADLINES

For example, Miami-based Supra Telecom took almost two years to file a reorganization plan after it filed for Chapter 11 in October 2002. Under the new law, creditors will be able to file their own reorganization plan if the debtor hasn't filed a plan within 18 months.

''If I'm representing a creditor and I don't want to make a deal with the debtor, one of my options is attempt to wait them out the 18 months and then file my own plan,'' said Michael Goldberg, a bankruptcy lawyer with Akerman Senterfitt in Fort Lauderdale.

The new law also gives a creditor who provides services to a company within the 20 days preceding a Chapter 11 petition the right to full payment for the services. Under the current law, those creditors may only get a fraction of what they are owed.

There will also be restrictions on severance payouts to executives of companies in bankruptcy. Severance for executives now can be any reasonable amount. Under the new law, it is limited to 10 times the average given to non-management employees in the calendar year paid.

Martin Bienenstock, a bankruptcy expert in New York, said this provision will probably lead troubled companies to restructure their executive compensation packages. ''You'll see things like signing bonuses and other substitutes for severance,'' he said.

Often when companies enter Chapter 11, they pay key executives retention bonuses to ensure that they will stick around during the reorganization. Fort Lauderdale's America Online Latin America, for instance, received bankruptcy court approval in July to pay six executives $779,550 in retention bonuses -- including $230,550 to Chief Executive Charles Herrington.

EXECUTIVE BONUSES

Generally, companies only have to show the court that the retention bonuses are in the best interest of the bankruptcy estate, Goldberg said. Under the new law, he said, companies will have to show the bonuses are essential to the business's survival and that their executives have received bona fide offers from new employers.

''Essentially, the executives have to go out and get a job offer,'' Goldberg said. ``At that point, it makes it even more difficult to keep them. It's nonsensical.''

The new law also limits to 210 days from the bankruptcy filing date the time in which a debtor has to assume or reject leases unless a landlord agrees to an extension. Currently, the court can grant unlimited extensions.

The restriction involving assumption or rejection of leases is of particular relevance to airlines and retailers.

Bienenstock said 210 days, or seven months, might not be enough time for creditor committees in bankruptcy cases involving hundreds of leases to form an opinion about whether the company should reorganize or liquidate.

''It's forcing parties to make decisions much faster,'' said Berlin, the Miami lawyer. ``Where's the empirical evidence that demonstrates making these decisions faster is going to create a better result?''

Companies may be under pressure to decide which leases to keep and which leases they may want to reject. That increases the likelihood that landlords can take back their leases, Bienenstock said.

Herald business writer Patrick Danner contributed to this report, which was supplemented with material from the Associated Press.