Open Access. Powered by Scholars. Published by Universities.®
Articles 1 - 30 of 41
Full-Text Articles in Law
The Success Of Chapter 11: A Challenge To The Critics, Elizabeth Warren, Jay Lawrence Westbrook
The Success Of Chapter 11: A Challenge To The Critics, Elizabeth Warren, Jay Lawrence Westbrook
Michigan Law Review
Although Chapter 11 has served as a model for bankruptcy reform around the world, the conventional wisdom has been that it is characterized by a relatively low success rate and endless delay. The data from large samples of Chapter 11 cases filed in 1994 and 2002 demonstrate that this characterization is wrong. Nearly all troubled companies choose Chapter 11 over Chapter 7 liquidation, which means that the system serves a critical screening function to eliminate hopeless cases relatively quickly. Almost half the unsuccessful cases were jettisoned within six months and almost eighty percent were gone within a year The cases …
Startegy And Force In The Liquidation Of Secured Debt, Ronald J. Mann
Startegy And Force In The Liquidation Of Secured Debt, Ronald J. Mann
Michigan Law Review
The question of why parties use secured debt is one of the most fundamental questions in commercial finance. The commonplace answer focuses on force: A grant of collateral to a lender enhances the lender's ability to collect its debt by enhancing the lender's ability to take possession of the collateral by force and sell it to satisfy the debt. That perspective draws considerable support from the design of the major legal institutions that support secured debt: Article 9 of the Uniform Commercial Code and the less uniform state laws regarding real estate mortgages. Both of those institutions are designed solely …
Income Tax- Corporations-Legal Expenses Incurred In Sale Of Assets Pursuant To A Section 337 Liquidation Are Deductible-United States V. Mountain States Mixed Feed Co., Michigan Law Review
Income Tax- Corporations-Legal Expenses Incurred In Sale Of Assets Pursuant To A Section 337 Liquidation Are Deductible-United States V. Mountain States Mixed Feed Co., Michigan Law Review
Michigan Law Review
In 1961, the stockholders of the Mountain States Mixed Feed Co. voted to liquidate the corporation in such a way as to comply with the requirements of section 337 of the Internal Revenue Code of 1954 (Code). That section provides that if a corporation adopts a plan of complete liquidation, and then within twelve months distributes all its assets, it will not recognize a gain or loss for income tax purposes from the sale or exchange of certain types of property. The corporation sold all of its assets and qualified for non-recognition treatment under section 337. It then claimed a …
Judgment Against Insured Is Conclusive Proof Of Amount Of Claim Against Dissolved Insurer- Commonwealth Ex Rel. Woodside V. Seaboard Mut. Cas. Co., Michigan Law Review
Judgment Against Insured Is Conclusive Proof Of Amount Of Claim Against Dissolved Insurer- Commonwealth Ex Rel. Woodside V. Seaboard Mut. Cas. Co., Michigan Law Review
Michigan Law Review
Plaintiffs, injured in an automobile accident, brought suits against an insured taxicab company. Before the case came to trial, the insurance commissioner found the insurer insolvent. In a separate proceeding he obtained a court order dissolving the insurer, enjoining the prosecution of any legal action against the insurer's assets, and providing for the filing of proof of claims with the insurance commissioner. The insurer's attorney, who had entered an appearance on behalf of the taxicab company, withdrew, and in an undefended action the plaintiffs recovered judgments against the cab company totalling nineteen thousand dollars. Unable to obtain execution on these …
Personal Holding Companies And The Revenue Act Of 1964, Jerome B. Libin
Personal Holding Companies And The Revenue Act Of 1964, Jerome B. Libin
Michigan Law Review
By 1964, many years had elapsed since significant changes were made in the federal income tax treatment of so-called "personal holding companies." For that reason alone, any amendments contained in the Revenue Act of 1964 that dealt with personal holding companies would have deserved attention. But the fact is that the changes made by the 1964 Act are so powerful in their thrust that they require the most careful kind of study by every practitioner charged with advising closely held corporations. Since the new provisions are rather complicated in nature, such a study cannot lead to a full understanding of …
Right Of A Surviving Partner To Purchase A Deceased Partner's Interest Under The Uniform Partnership Act, Charles R. Frederickson
Right Of A Surviving Partner To Purchase A Deceased Partner's Interest Under The Uniform Partnership Act, Charles R. Frederickson
Michigan Law Review
This discussion is intended to demonstrate that, under the act, the likelihood of fraud should no longer be so controlling a factor as to require invariably a liquidation sale of partnership assets when a court of equity has within its supervisory powers the ability to protect fully all of the parties involved when a partnership is dissolved by death.
Insider Securities Dealings During Corporate Crises, Victor Brudney
Insider Securities Dealings During Corporate Crises, Victor Brudney
Michigan Law Review
The problem of assuring the fidelity of corporate insiders to the public investors in their enterprises figured prominently in legal literature and law reform proposals twenty-five or thirty years ago. In recent years, that question has attracted relatively less attention-in part because of the appearance or recognition of more significant problems in the relationship of publicly-held corporate enterprise to the national well-being, but in part also because of the development by courts, legislatures and administrative agencies-and to some extent by the insiders' community itself-of more exacting standards of loyalty. Recognition of broader obligations to their corporations and to public investors …
Tingle: The Stockholder's Remedy Of Corporate Dissolution, Hugh L. Sowards
Tingle: The Stockholder's Remedy Of Corporate Dissolution, Hugh L. Sowards
Michigan Law Review
A Review of The Stockholder's Remedy of Corporate Dissolution. By James O'Malley Tingle
Corporations - Liquidation Upon Deadlock In Closely-Held Corporation - Interpretion Of Wisconsin Statute, Strong V. Fromm Laboratories,, Paul Komives
Michigan Law Review
Plaintiff, as trustee of an estate, held fifty percent of the shares of a going corporation. An election to fill all four positions on the corporation's board of directors was held. Since a by-law required that directors be shareholders, plaintiff was the only member of his own faction for whom he could vote. The opposing faction, holding the remaining fifty percent of the shares, had four eligible candidates. Votes for each of the four were cast, with one receiving one vote less than the other three. Plaintiff voted all of his shares for himself and also cast a vote of …
Bankruptcy-Test Of Feasibility Under Chapter Xi Arrangement, Paul B. Campbell S.Ed.
Bankruptcy-Test Of Feasibility Under Chapter Xi Arrangement, Paul B. Campbell S.Ed.
Michigan Law Review
The Slumberland Bedding Company started in business in 1952 with a capitalization of $13,000. Within less than one year the corporation was "clearly heavily insolvent," having debts in excess of $85,000 and assets valued "at least several thousand dollars less than $42,250." Preferred creditor claims against the assets of the business amounted to more than $32,200. In this rather dismal context a petition for an arrangement under chapter XI of the Bankruptcy Act was filed. A plan was submitted which provided for independent capital to be put into the business to pay certain claims in full and to pay a …
"Fair And Equitable" Distribution Of Voting Power Under The Public Utility Holding Company Act Of 1935, Leo W. Leary
"Fair And Equitable" Distribution Of Voting Power Under The Public Utility Holding Company Act Of 1935, Leo W. Leary
Michigan Law Review
In the Public Utility Holding Company Act of 1935 Congress gave the Securities and Exchange Commission the task of investigating voting power distribution among security holders in electric and gas holding companies and their subsidiaries. If the Commission finds that the corporate structure or continued existence of any company in a holding company system "unfairly or inequitably" distributes voting power among the investors in the system, it is the Commission's duty to order the offending corporation to take "such steps as the Commission shall find necessary" to cure this condition. This paper is an attempt to ascertain what the Commission …
Corporations-Majority Shareholder's Fraud In The Purchase Of Stock, Thomas P. Segerson S.Ed.
Corporations-Majority Shareholder's Fraud In The Purchase Of Stock, Thomas P. Segerson S.Ed.
Michigan Law Review
Whether or not there has been fraud in the purchase of property, due to either affirmative statements or mere non-disclosure, may well depend upon the relation of the purchaser to the vendor. The recent case of Speed v. Transamerica Corporation presents two questions relative to this problem in the purchase of corporation shares: first, whether the price quoted in an offer to purchase can ever be the basis of an action for fraud and deceit; and second, whether the majority shareholder of a corporation occupies a fiduciary relation to minority shareholders in the purchase of their stock. Defendant was the …
Corporations-Dissolution-Payment Of "Accrued Unpaid Dividends" To Preferred Shareholders From Capital, Frank M. Bowen, Jr.
Corporations-Dissolution-Payment Of "Accrued Unpaid Dividends" To Preferred Shareholders From Capital, Frank M. Bowen, Jr.
Michigan Law Review
The Big Bend Land Company was in the process of liquidation. The articles of incorporation provided for preferred stock which "in the event of any liquidation . . . " was " . . . entitled to be paid in full the par value thereof, and all accrued unpaid dividends thereon before any sum shall be paid to or any assets distributed among . . ." the common stock. No dividends had ever been declared or paid, nor had there ever been any surplus profits. After discharging all corporate liabilities, including payment of the par value of the preferred stock, …
Taxing Distributions Pursuant To Corporate Reorganizations, William M. Emery
Taxing Distributions Pursuant To Corporate Reorganizations, William M. Emery
Michigan Law Review
"Distributions" implies that we are concerned with the tax problems of the stockholder rather than those of the corporation. And while one corporation may be the stockholder of another, my emphasis will be primarily upon stockholders who are individuals, including, of course, trusts and estates who are taxed as individuals.
Some Latter Day Developments In The Taxation Of Liquidating Distributions: Is The Cop Still On The Beat?, Willard H. Pedrick
Some Latter Day Developments In The Taxation Of Liquidating Distributions: Is The Cop Still On The Beat?, Willard H. Pedrick
Michigan Law Review
Redemption and salvation are doctrinal terms suggestive of the enthusiasm of the camp meeting. It is altogether fitting that these terms be used in connection with the taxation of corporate liquidating distributions. Through redemption of his stock the shareholder may find this world's nearest approach to fiscal salvation-taxation of his receipts on a capital-gains basis. To say the shareholder's enthusiasm for capital-gains treatment approaches a religious zeal is to underestimate the matter. Nor is it difficult to understand his attitude. If corporate earnings and profits, subjected at the outset to a relatively Hat but heavy corporate income tax, are paid …
Insolvent Decedents' Estates, Kurt H. Nadelmann
Insolvent Decedents' Estates, Kurt H. Nadelmann
Michigan Law Review
The problems of insolvent decedents' estates have created special difficulties in all legal systems. Two unrelated fields of the law are involved: decedents' estates and insolvency. Treatment of the topic in works on one or the other field is often scanty and few studies exist which deal exclusively with insolvent decedents' estates law. Research in the conflicts problems of the field has led the writer to investigate the differences in the treatment of insolvent decedents' estates in this country, other common law countries, and countries of the civil law. Results of this study are used to discuss problems of the …
Bankruptcy-The New Test Of Perfection Under Section 60a-Effect Of Public Law 461, William R. Worth S.Ed.
Bankruptcy-The New Test Of Perfection Under Section 60a-Effect Of Public Law 461, William R. Worth S.Ed.
Michigan Law Review
A preference given to a creditor by an insolvent debtor is not a fraud on his other creditors, regardless of the fact that such payment reduces the share that they would be able to obtain upon an orderly liquidation and pro rata distribution of his estate. This simple principle has caused great confusion and trouble in the development of collective procedures for the satisfaction of the claims of creditors. It led through various channels to a very sweeping definition of preferences and provision for their avoidance in the Chandler Act of 1938, and has now produced, by a process of …
Corporations-Applicability Of General Corporate Dissolution Procedure To Associations Organized Under Building And Loan Act, Howard W. Haftel S.Ed.
Corporations-Applicability Of General Corporate Dissolution Procedure To Associations Organized Under Building And Loan Act, Howard W. Haftel S.Ed.
Michigan Law Review
Building and loan associations are organizations designed for the general purpose of accumulating by gradual payments of their members a fund to be invested primarily in loans on real estate. At present these organizations almost invariably are corporations for profit. Because of their economic importance these associations have long been regarded as affected with a public interest and therefore subject to a higher degree of regulation than would be sustained in the case of ordinary profit-making corporations. Special legislation is necessary because building and loan associations differ widely from other corporations in financial structure and operation.
Partnership -- Uniform Partnership Act--Right Of Surviving Partner To Purchase Partnership Property, Melvin J. Spencer
Partnership -- Uniform Partnership Act--Right Of Surviving Partner To Purchase Partnership Property, Melvin J. Spencer
Michigan Law Review
Defendants, administrators of the estate of the deceased partner, agreed with the surviving partner to continue the partnership hotel business, with the approval of the probate court. After some operation, the surviving partner sued to compel the administrators to sell him the interest of the deceased at a value to be judicially determined. Defendants cross-complained, asking the court to liquidate the business and award them the amount of the interest of the deceased in the proceeds. Held, reversing the decree below, the assets of the dissolved partnership should be liquidated, in accord with defendants' prayer. Zach v. Schulman, …
Partnership-Effect Of Provision That Executor Of Deceased Partner Shall Continue Partnership As Partner, Irving Slifkin S.Ed.
Partnership-Effect Of Provision That Executor Of Deceased Partner Shall Continue Partnership As Partner, Irving Slifkin S.Ed.
Michigan Law Review
In a recent decision the Wisconsin Supreme Court upheld the validity of a provision in a partnership agreement to the effect that the personal representative of the deceased partner should continue the business as a partner, and also stated: "There is no doubt that a partner may provide by his will that the partnership shall continue notwithstanding his death." The deceased partner by his will gave to his executor broad discretionary powers of sale over all of his property. To his widow the deceased partner bequeathed a share of his interest in the partnership business. The executor of the deceased …
Corporations-Extent Of Powers To Dispose Of Property In Winding Up Its Affairs Under Statutes Extending Corporate Existence, Joseph R. Brookshire S.Ed.
Corporations-Extent Of Powers To Dispose Of Property In Winding Up Its Affairs Under Statutes Extending Corporate Existence, Joseph R. Brookshire S.Ed.
Michigan Law Review
According to the common law a dissolved corporation ceased to exist for all purposes. Whether the dissolution was voluntary or involuntary, the effect of the dissolution was to deprive the corporation of all powers either de jure or de facto. It was necessary, therefore, that corporations facing dissolution proceed without delay toward a final liquidation and distribution of assets. Disregarding the old theory that personal property of dissolved corporations escheated to the state, and that its real estate reverted to the original granter or his heirs, and that debts due the corporation were extinguished, it is still apparent that hurried …
Taxation Of Partnership Assets Received By A Deceased Partner And His Estate, Donald H. Treadwell
Taxation Of Partnership Assets Received By A Deceased Partner And His Estate, Donald H. Treadwell
Michigan Law Review
The raising of funds to pay taxes will probably be a major problem of business men for many years to come. Closely rivaling it, however, is the problem of computing the tax. Though the economic definitions of income may be relatively simple, the complex business relationships necessitating equally complex accounting procedures often make the computation of income extremely difficult. This was demonstrated in the recent case of Helvering v. Enright's Estate, a tax case arising out of the death of a law partner. At the time of his death there were three types of assets which had been acquired …
Banks And Banking - Immunity Of National Banks From State Escheat Statute, Spencer E. Irons
Banks And Banking - Immunity Of National Banks From State Escheat Statute, Spencer E. Irons
Michigan Law Review
A Michigan statute provided that bank deposits, in the possession or control of insolvent banks, which have remained inactive for a period of seven years or more shall escheat to the state. In a suit for a declaratory judgment, filed by the Attorney General of Michigan, against the receiver of an insolvent national bank and the Comptroller of the Currency of the United States, the federal district court held that the receiver must turn over deposits coming within the terms of the statute. Held, the statute is invalid if so applied, since it would constitute an unlawful interference with …
Holding Company Act - "Fair And Equitable" Plan, Michigan Law Review
Holding Company Act - "Fair And Equitable" Plan, Michigan Law Review
Michigan Law Review
Should the words "fair and equitable" in section II (e) of the Holding Company Act be construed differently than the same words in section 77 B of the Bankruptcy Act? The Securities and Exchange Commission faced this question in disposing of a proposed plan of merger involving Utility Operators Company and subsidiaries. A divided commission gave an affirmative answer to the above question, holding "fair and equitable" in the Holding Company Act to permit relative priority. This holding merits particular interest since the United States Supreme Court has held the same words as used in section 77B permitted only absolute …
Bankruptcy - Amenability Of Farmers' Marketing Co-Operatives To Involuntary Proceedings, Kenneth J. Nordstrom
Bankruptcy - Amenability Of Farmers' Marketing Co-Operatives To Involuntary Proceedings, Kenneth J. Nordstrom
Michigan Law Review
Creditors of the Wisconsin Cooperative Mille Pool filed a petition asking that the milk pool be adjudicated an involuntary bankrupt. This co-operative association was organized under Wisconsin statutes to operate on a nonstock, nonprofit basis as the exclusive marketing agent for its members. The pool also marketed the products of patrons who were not members of the pool; however, sixty-five per cent of its patrons were active members. Held, the association was not a "moneyed, business, or commercial corporation" and hence was not amenable to adjudication as an involuntary bankrupt/ despite the fact that it was engaged in business …
Glenn On Fraudulent Conveyances And Preferences, Fred T. Hanson
Glenn On Fraudulent Conveyances And Preferences, Fred T. Hanson
Michigan Law Review
Professor Glenn's new two volume work on Fraudulent Conveyances and Preferences is much more than a revised edition of his previous book. The treatment of preferences is new and the material in the old book is revised and expanded. This expansion is particularly evident in his dealing with commercial financing devices--consignments, trust receipts, after-acquired property clauses, and freehanded mortgages of goods and accounts--which he now views also from the standpoint of preference.
Trusts - Constructive Trusts - Preferential Claim Against Bank's Assets For Deposits Made After Hopeless Insolvency, James W. Deer
Trusts - Constructive Trusts - Preferential Claim Against Bank's Assets For Deposits Made After Hopeless Insolvency, James W. Deer
Michigan Law Review
On proclamation by the governor of the so-called bank holiday, the Union Guardian Trust Company was closed as of February 11, 1933. The evidence showed that within nine months of closing the company had made provision for obtaining $2,500,000 by pledging assets, had received loans amounting to $12,000,000 from the Reconstruction Finance Corporation, and was conferring frequently with the officers of· that agency to negotiate an additional $44,000,000 loan. Under the authority of emergency legislation passed after the bank holiday, a conservator was appointed. By the plan of reorganization all the assets of the company were set aside in a …
Corporations - Derivative Suits - Insolvency As A Bar, Edmund O'Hare
Corporations - Derivative Suits - Insolvency As A Bar, Edmund O'Hare
Michigan Law Review
Plaintiff, stockholder in defendant bank, brought a derivative suit against the bank's directors to recover moneys allegedly wrongfully appropriated by them from the bank's assets. Before the commencement of the suit the bank had become insolvent and was in the process of liquidation. Held, the directors' motion to dismiss should be granted, since a stockholder may not maintain an action to hold an insolvent corporation's directors liable for fraud or mismanagement unless it appears that he will be benefited by the relief demanded, and full recovery here would still leave an excess of liabilities over assets. Falvey v. Foreman-State …
Torts - Negligent Misrepresentations - Information Gratuitously Supplied, Michigan Law Review
Torts - Negligent Misrepresentations - Information Gratuitously Supplied, Michigan Law Review
Michigan Law Review
Plaintiffs, who were liquidating trustees of a building and loan association, alleged that the association requested defendant to send it a copy of a certain will, but that defendant, who was trustee under the will, sent the association a copy of another will. Since the testators bore the same name, the association did not realize the error, but relied on the copy and suffered a loss which it would not have suffered if it had known the true state of facts. Plaintiffs sued to recover the loss. Held, plaintiffs have not stated a cause of action, inasmuch as they …
Insolvency-The Co-Debtor As A Factor In Distribution, Fred T. Hanson
Insolvency-The Co-Debtor As A Factor In Distribution, Fred T. Hanson
Michigan Law Review
The problems in distribution peculiar to claims upon which another is liable with the insolvent have received little critical analysis in judicial decisions. This is largely because the chancery rule, governing the treatment of lienors, is widely accepted as the solution in every instance where one creditor has an exclusive resource from which he may obtain payment wholly or in part.