Even if that's true, current bankruptcy law is still really far from socially optimal.

There are a lot more points on the "how does your system respond to business failure" spectrum besides low-consequence ch11/better-luck-next-time and debtors' prison.

What's a country with a more effective system? Not saying that the lack of a more effective system means the US's is optimal, but the outcomes for capital reallocation are far better in the US than the UK for instance.

In the US, workers at a bankrupt company can often show up to the same workplace the next day or week and not skip a beat, the customers might not even know they're doing business with a different entity - only the owners have changed - the old ones get wiped out and their debtors take control.