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Business Law, Public Responsibility, and Ethics Commons

Open Access. Powered by Scholars. Published by Universities.®

Faculty Scholarship at Penn Law

Political Economy

Derivative contracts

2009

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Full-Text Articles in Business Law, Public Responsibility, and Ethics

Bankruptcy Boundary Games, David A. Skeel Jr. Jan 2009

Bankruptcy Boundary Games, David A. Skeel Jr.

Faculty Scholarship at Penn Law

For the past several decades, Congress has steadily expanded the exclusion of securities market operations from core bankruptcy protections. This Article focuses on three of the most important of these issues: the exclusion of brokerage firms from Chapter 11; the protection of settlement payments from avoidance as preferences or fraudulent conveyances; and the exemption of derivatives from the automatic stay and other basic bankruptcy provisions. In Parts I, II and III of the Article, I consider each of the issues in turn, showing that each has had serious unintended consequences. Both Drexel Burnham and Lehman Brothers evaded the brokerage exclusion ...