Law Commons^™

The Impairment Of Secured Creditors’ Rights In Reorganization: A Study Of The Relationship Between The Fifth Amendment And The Bankruptcy Clause, James S. Rogers

James S. Rogers

Some commentators and courts have argued that the takings clause of the fifth amendment limits congressional power to interfere with property rights in bankruptcy proceedings. In this Article, Professor Rogers argues to the contrary that, at least with respect to prospective bankruptcy legislation, the bankruptcy clause itself and not the fifth amendment limits congressional bankruptcy power. His view derives from nineteenth and twentieth century case law, particularly cases assessing the validity of restraints on secured creditors' foreclosure rights, and from the theoretical difficulty of distinguishing between supposedly protected property rights and supposedly unprotected contract interests. Professor Rogers also sharply criticizes …

Licensing Intellectual Property And Technology From The Financially-Troubled Or Startup Company: Prebankruptcy Strategies To Minimize The Risk In A Licensee's Intellectual Property And Technology Investment, Richard M. Cieri, Michelle M. Harner

Michelle M. Harner

No abstract provided.

Hey Uncle Sam, Can You Spare A Couple Billion?: Examining The Constitutionality Of A State Bankruptcy Chapter, David E. Solan

David E Solan

During February 2011 the prospect of creating a state bankruptcy chapter burst onto the national conversation. This debate largely centered on the necessity of state bankruptcy as a means of averting state bailouts, while some commentators vaguely invoked the need to tread gingerly on state prerogatives under the 10th Amendment. However, the constitutionality of bankruptcy-for-states demands closer scrutiny given that the Supreme Court’s recent 10th Amendment jurisprudence has evolved in the direction of protecting state sovereignty.

The Article examines a pair of cases from the 1930s that contested the constitutionality of municipal bankruptcy, and argues that the principles handed down …

No More Abuse: The Dodd-Frank And Consumer Financial Protection Act's "Abusive" Standard, Tiffany S. Lee

Tiffany S Lee

The Dodd-Frank Wall Street Reform and Consumer Financial Protection Act creates the new Bureau of Consumer Financial Protection. This consumer watchdog will be responsible for the most powerful consumer protections in American history. Under section 1031(d) of the Act, the Bureau may ban acts and practices that are unfair, deceptive, or abusive. While the unfair and deceptive standards have existed for some time, “abusive” is a relatively new legal standard with limited jurisprudential history. Thus, ironically, critics assert that the inclusion of the abusive standard is itself an abuse of legislative power. This Article asserts that despite some criticism to …

Reinstatement V. Cramdown: Do Secured Creditors Win Or Lose?, Heather Lennox, Michelle M. Harner, Eric R. Goodman

Michelle M. Harner

No abstract provided.

Allocating Loss In Securities Fraud: Time To Adopt A Uniform Rule For The Special Case Of Ponzi Schemes, Grant Christensen

Grant Christensen

The Global Financial Crisis precipitated a condensing of capital and a fall in global equities markets that resulted not solely in the necessity of government bailouts of the financial industry but also exposed a number of Ponzi schemes that collectively will cost investors tens of billions of dollars. With a new wave of litigation by innocent investors against Ponzi scheme operators just beginning, and likely to take years, it becomes important to clearly identify the methodologies used to value the loss and allocate existing assets among remaining creditors. To that end I offer this article to argue that courts ought …

The Potential Value Of Dynamic Tension In Restructuring Negotiations, Michelle M. Harner, Jamie Marincic

Michelle M. Harner

No abstract provided.

Dip Lending And The Death Of Emergence: Reorganization Outcomes Post-Crisis, Aditya Habbu, Nikhil Abraham

Nikhil Abraham

We examine bankruptcy successes and failures before and after the credit crisis for those debtors that sought DIP loans. We found that post-crisis, for companies that filed for bankruptcy stand alone emergences decreased (percentage-wise), while sales increased. Additionally, we found that post-crisis private equity fund involvement in debtor in possession (“DIP”) loans increased, and DIP loan interest rates increased as well. To supplement the analysis we surveyed practitioners, interviewing two Federal bankruptcy judges, a restructuring investment bank managing director, as well as DIP lenders. These interviews and our data support the view that while DIP loans were once a path …

Marginalizing Risk, Steven L. Schwarcz

Steven L Schwarcz

A major focus of finance is reducing risk on investments, a goal commonly achieved by dispersing the risk among numerous investors. Sometimes, however, risk dispersion can cause investors to underestimate and under-protect against risk. Risk can even be so widely dispersed that rational investors individually lack the incentive to monitor it. This article examines the market failures resulting from risk dispersion, and analyzes when government regulation may be necessary or appropriate to limit these market failures. The article also examines how such regulation should be designed, including the extent to which it should limit risk dispersion in the first instance.

The Legal Aspects Of Non-Financial Market Central Counterparties (Ccp): A Case Comment On Iata V. Ansett, Christian Chamorro-Courtland

Christian Chamorro-Courtland

International Air Transportation Association (IATA) v. Ansett (2008) was decided correctly by the High Court of Australia. However, the reasoning of the judges was unsound due to their apparent unfamiliarity with the operation of Central Counterparty (CCP) systems. The judges failed to recognize that ‘open offer’ was the mechanism of counterparty substitution used in the IATA clearing rules to create mutuality and guarantee multilateral insolvency set-off. This article analyses the Ansett decision and describes the legal principles that should have been used to decide the case. Only financial market CCPs receive special statutory protections from burdensome corporate insolvency laws. Therefore, …

Bankruptcy, Relocation And The Debtor’S Dilemma: Preserving Your Homestead Exemption Versus Accepting The New Job Out Of State, Timothy R. Tarvin

Timothy R Tarvin