Law Commons^™

A Bona Fide Dispute: Can Bankrupt Debtors Sell Assets Free And Clear Of Federal Civil Forfeiture Claims?, Joseph Peter Gomez

Fordham Journal of Corporate & Financial Law

Auctions are wheeling-dealing extravaganzas in which frenzies of bidders fight over shiny objects. What would happen if the government busted down the doors of the auction house, took the shiny objects, and sold them online? An asset sale through section 363(b) of the Bankruptcy Code provides a court-supervised opportunity to maximize economic value for the bankruptcy estate. To sell estate assets, the debtor must either (1) pay off each creditor holding an interest in the assets or (2) strip the creditor’s interest and attach it to the proceeds of the sale. When the government asserts a civil forfeiture claim against …

The Lease Of All Evils: How A Middle-Ground Approach Can Resolve The Bankruptcy Code Conflict Between Section 363(F) Sales And Section 365(H) Lessee Protections, Kate Christensen

Fordham Journal of Corporate & Financial Law

The Fifth Circuit’s recent decision in In re Royal St. Bistro, LLC has awakened an unsettled issue in the Bankruptcy Code that has divided the bankruptcy community for over two decades. The question examined by the Fifth Circuit was whether a non-debtor lessee with a right to continued possession through section 365(h) of the Bankruptcy Code loses this right if the debtor-lessor can sell its property “free and clear” under section 363(f). While early decisions held that section 365(h) always protects lessees against debtors’ free and clear sales, some subsequent decisions created a circuit split by ruling that section 365(h) …

The Bankruptcy Of Purdue Pharma In The Wake Of Big Tobacco, Jacob Hedgpeth

University of Colorado Law Review Forum

Two distinct public health crises shook the United States from 1954 to 2023: nicotine addiction from tobacco products, and opioid addiction starting with Purdue Pharmaceutical’s OxyContin. These crises resulted in millions of deaths and immense costs to the country as a whole. The nicotine crisis ended in a national settlement against four major tobacco manufacturers, which yielded hundreds of millions of dollars for those harmed by these products. The owners of Purdue, however, opted for bankruptcy instead of settlement, keeping the majority of the money made from OxyContin for Purdue’s owners, the Sackler family.

These four tobacco giants and Purdue …

Without Reservation: Ensuring Uniform Treatment In Bankruptcy While Keeping In Mind The Interests Of Native American Individuals And Tribes, Connor D. Hicks

Fordham Journal of Corporate & Financial Law

The Bankruptcy Code (“Code”) exists as a mechanism for good faith debtors to discharge debts and seek a “fresh start” in life and finance. 11 U.S.C. § 106(a) ensures that not only are all debtors treated uniformly, but that all creditors, including governmental creditors which may otherwise enjoy immunity from suit, are equally subject to the jurisdiction of Bankruptcy courts and bound to the provisions of the Code.

However, a recent circuit split has demonstrated one niche yet significant instance in which a debtor may not receive the same treatment as their counterparts. While § 106 contains an express waiver …

Chief Loophole Officer Or Chief Legal Officer: Inside Lehman Brothers—A Film Case Study About Corporate And Legal Ethics, Garrick Apollon

St. Mary's Journal on Legal Malpractice & Ethics

This Article discusses the continuing legal education (CLE) visual advocacy documentary-style program, which Garrick Apollon (author of this Article) researched and developed. The case study for this CLE documentary-style program is the film Inside Lehman Brothers—a documentary film by Jennifer Deschamps which chronicles the story of the Lehman whistleblowers. The film presents Mathew Lee, former senior vice president overseeing Lehman’s global balance sheet; Oliver Budde, former in-house counsel (associate general counsel) of the Lehman Brothers; and the racialized female mid-tier manager whistleblowers, who all paid a steep price in the 2008 American subprime mortgage crisis, while many of the …

An Innovative Framework: Evaluating The New German Business Stabilization And Restructuring Law (Starug), Andreas Rauch

Northwestern Journal of International Law & Business

This comment examines the restructuring framework, restrukturierungsgesetz (“StaRUG”), and argues that this new law represents an effective—albeit radical—departure from Germany’s previous, conservative insolvency regime. Passed in response to a 2019 EU Directive aimed at modernizing restructuring law Union-wide, and integrated into the German legal system against the backdrop of the COVID-19 pandemic, StaRUG and its ancillary reforms in other areas of German law create a restructuring proceeding that places a premium on a debtor’s continued business operations. Thus, in a striking shift from the traditional German approach to business distress, which strongly emphasized creditor rights, the new StaRUG focuses on …

The Lehman Brothers Bankruptcy C: Managing The Balance Sheet Through The Use Of Repo 105, Rosalind Z. Wiggins, Andrew Metrick

Journal of Financial Crises

The Lehman Brothers court-appointed bankruptcy examiner produced a 2,200-page report detailing possible claims that the estate might pursue. The most surprising revelation of the report was that during its last year Lehman had relied heavily on an unusual financing transaction—Repo 105. The examiner concluded that Lehman’s aggressive use of Repo 105 transactions enabled it to remove up to $50 billion of assets from its balance sheet at quarter-end and to manipulate its leverage ratio so that it could report more favorable results. This case considers in-depth Lehman’s questionable use of Repo 105 transactions and its impact.

Venezuela Undermines Gold Miner Crystallex's Attempts To Recover On Its Icsid Award, Sam Wesson

Loyola of Los Angeles International and Comparative Law Review

No abstract provided.

The Overstated Absolute Priority Rule, Stephen J. Lubben

Fordham Journal of Corporate & Financial Law

No abstract provided.

Lost In Translation: Till V. Scs Credit Corp. And The Mistaken Transfer Of A Consumer Bankruptcy Repayment Formula To Chapter 11 Reorganizations, Mark J. Thompson, Katie M. Mcdonough

Fordham Journal of Corporate & Financial Law

This Article argues that courts overseeing chapter 11 cases have been mistakenly invoking the Supreme Court’s 2004 decision in Till v. SCS Credit Corp.—which specified a consumer-friendly formula for setting the interest rate on the remaining payments on a loan that financed a used pickup truck—at the expense of over a century of Supreme Court precedents that established the contrastingly creditor friendly “fair and equitable” standard for repayment of business debts, as well as disregarding a clear statutory distinction between the present value tests in chapters 11 and 13. This Article also discusses the controversial 2014 decision in Momentive Performance …

4th And 205: How A Rush Of Global Comments Blocked The Sec’S First Attempted Punt Of Attorney-Client Privilege Under Sarbanes-Oxley, John Paul Lucci

Touro Law Review

No abstract provided.

Chapter 11 Asset Sales: Will There Be A Chilling Effect On Section 363(K) Credit Bidding After In Re Fisker Automotive Holdings Llc?, Riley Orloff

Fordham Journal of Corporate & Financial Law

No abstract provided.

Politics In The American Airlines-U.S. Airways Merger And Antitrust Settlement, Michelle Chan

Fordham Journal of Corporate & Financial Law

American Airlines was one of the airline industry’s darlings. A legacy airline, it was a household name, a massive entity, employed thousands, and commanded a fearsome presence among other industry players like unions and airport terminals. However, with ballooning costs and the red ocean airline industry’s evolution, American Airlines’ parent company, AMR, was forced into bankruptcy in November 2011. To emerge from Chapter 11, American Airlines and U.S. Airways announced plans to merge and come out a stronger, larger airline in February 2013. The Department of Justice Antitrust Division shortly thereafter filed a lawsuit opposing the merger, alleging it would …

Not Out Of The (Fox)Woods Yet: Indian Gaming And The Bankruptcy Code, Emir Aly Crowne, Andrew Black, S. Alex Constantin

UNLV Gaming Law Journal

The recent economic downturn has caused Foxwoods Resort Casino, one of the largest casinos in the world, to seek a restructuring of nearly $1.5 billion in debt. Ordinarily, bankruptcy proceedings are triggered when a typical commercial enterprise defaults on its debt. Under these proceedings, creditors step in and collect monies owed to them before any residual equity is dispersed amongst owners. The rub here is that Foxwoods is owned and operated by the Mashantucket Western Pequot Tribal Nation, a sovereign nation under U.S. federal law. This triggers questions of paramountcy; namely, whether tribunal sovereignty can trump federal bankruptcy law.

These …