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Full-Text Articles in Law

Errors In Judgment Or How To Get Debts Discharged In Bankruptcy "(Il)Legally" And Other Notice Issues, Pearson Liddell Jr., Gloria J. Liddell Oct 2010

Errors In Judgment Or How To Get Debts Discharged In Bankruptcy "(Il)Legally" And Other Notice Issues, Pearson Liddell Jr., Gloria J. Liddell

Pearson Liddell Jr.

ABSTRACT ERRORS IN JUDGMENT or HOW TO GET DEBTS DISCHARGED IN BANKRUPTCY (IL)LEGALLY: A MATTER of NOTICE On March 23, 2010, the U.S. Supreme Court decided the case of United Student Aid Funds, Inc. v. Espinosa. By this case a debtor was relieved of an obligation to pay a student loan notwithstanding the fact that the debtor had not followed the prescribed procedure for obtaining a discharge of that debt. The U. S. Bankruptcy Code (“Code”) requires that a debtor initiate an adversary proceeding to determine the dischargeability of such debts based upon a finding of “undue hardship”. This proceeding …


Making Debtor Remedies More Effective, Melissa B. Jacoby Apr 2010

Making Debtor Remedies More Effective, Melissa B. Jacoby

Melissa B. Jacoby

Commissioned for a conference on credit markets at Harvard Business School in February 2010, this paper explores functional system design and the role of lawyers and intermediaries in providing debtor remedies in a complex legal system. The thesis of this paper, which proceeds in the “law and society” tradition, is that the location of a remedial right within the debtor-creditor system substantially affects the costs and benefits of the remedy for debtors, creditors, the system, and society. In other words, merely adding specific substantive provisions does not directly translate into actual protection. Relatedly, policymakers must recognize that lawyers and other …


Trends In Distressed Debt Investing: An Empirical Study Of Investors' Objectives, Michelle M. Harner Mar 2010

Trends In Distressed Debt Investing: An Empirical Study Of Investors' Objectives, Michelle M. Harner

Michelle M. Harner

Increased creditor control in chapter 11 cases has generated considerable debate over the past several years. Proponents of creditor control argue that, among other things, it promotes efficiency in corporate reorganizations. Critics assert that it destroys corporate value and frequently forces otherwise viable entities to liquidate. The increasing involvement of professional distressed debt investors in chapter 11 cases has intensified this debate. In this article, I present and analyze empirical data regarding the investment practices and strategies of distressed debt investors. Based on this data and actual case reports, I reach two primary conclusions. First, although relatively few in number, …


The Corporate Governance And Public Policy Implications Of Activist Distressed Debt Investing, Michelle M. Harner Mar 2010

The Corporate Governance And Public Policy Implications Of Activist Distressed Debt Investing, Michelle M. Harner

Michelle M. Harner

Activist institutional investors traditionally have invested in a company's equity to try to influence change at the company. Some of these investors, however, are now purchasing a company's debt for this same purpose. They may seek to change a company's management and board personnel, operational strategies, asset holdings or capital structure. The chapter 11 bankruptcy cases of Allied Holdings, Inc. and its affiliates exemplify the strategies of activist distressed debt investors. In the Allied cases, Yucaipa Companies, a distressed debt investor, purchased approximately 66% of Allied's outstanding general unsecured bond debt. Yucaipa used this debt position to exert significant influence …


Managing Medical Bills On The Brink Of Bankruptcy, Melissa B. Jacoby, Mirya Holman Dec 2009

Managing Medical Bills On The Brink Of Bankruptcy, Melissa B. Jacoby, Mirya Holman

Melissa B. Jacoby

This paper presents original empirical evidence on financial interactions between medical providers and their patients who go bankrupt. We use a nationally representative sample of people who filed for bankruptcy in 2007 to compare two popular but hotly contested methods of measuring medical burden. By applying both methods to the same filers, we find that nearly four out of five respondents had some financial obligation for medical care not covered by insurance in the two years prior to filing as measured by the survey method. The court record method paints a different picture, with only half of the cases containing …


Saving Up For Bankruptcy, Ronald J. Mann, Katherine M. Porter Dec 2009

Saving Up For Bankruptcy, Ronald J. Mann, Katherine M. Porter

Ronald Mann

This paper probes the puzzle of why only a few of those for whom bankruptcy would be economically valuable ever choose to file. We use empirical evidence about the patterns of bankruptcy filings to understand what drives the point in time at which the filings occur, and to generate policy recommendations about how the bankruptcy and debt-collection system sorts those that need relief from those that do not. The paper combines three kinds of data. First, quantitative data collected from judicial filing records that show the weekly, monthly, and annual patterns of bankruptcy filings. Second, 40 interviews with industry professionals …