Open Access. Powered by Scholars. Published by Universities.®
Articles 1 - 2 of 2
Full-Text Articles in Law
Where's The Beef: A Few Words About Paying For Performance In Bankruptcy, Jonathan C. Lipson
Where's The Beef: A Few Words About Paying For Performance In Bankruptcy, Jonathan C. Lipson
All Faculty Scholarship
This brief essay responds to Yair Listokin’s article, “Paying for Performance in Bankruptcy: Why CEOs Should Be Compensated with Debt,” 155 U. PA. L. REV. 777 (2007). Professor Listokin argues that we should give official creditors’ committees the power to pay management of reorganizing debtors with corporate debt. This, he argues, would properly align their incentives with those who are most likely affected, the “residual claimant” unsecured creditors. Although Professor Listokin’s proposal is a welcome addition to our literature on corporate reorganization, this essay points out several basic problems with it: • First, nothing currently prevents parties from doing this …
The Expressive Function Of Directors’ Duties To Creditors, Jonathan C. Lipson
The Expressive Function Of Directors’ Duties To Creditors, Jonathan C. Lipson
All Faculty Scholarship
This Article offers an explanation of the “doctrine” of directors’ duties to creditors. Courts frequently say—but rarely hold—that corporate directors owe duties to or for the benefit of corporate creditors when the corporation is in distress. These cases are puzzling for at least two reasons. First, they link fiduciary duty to priority in right of payment, effectively treating creditors as if they were shareholders, at least for certain purposes. But this ignores the fact that priority is a complex and volatile concept. Moreover, contract and other rights at law usually protect creditors, even (especially) when a firm is distressed. It …