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Series

Bankruptcy Law

Chapter 11

University of Missouri School of Law

Publication Year

Articles 1 - 2 of 2

Full-Text Articles in Law

Relational Preferences In Chapter 11 Proceedings, Brook E. Gotberg Jul 2019

Relational Preferences In Chapter 11 Proceedings, Brook E. Gotberg

Faculty Publications

It is no secret that creditors hate so-called "preference" actions, which permit a debtor to recover payments made to creditors on the eve of bankruptcy for the benefit of the estate. Nominally, preference actions are intended to equalize the extent to which each unsecured creditor must bear the loss of a bankruptcy discharge, or to discourage creditors from rushing to collect from the debtor in such a way that will push an insolvent debtor into bankruptcy. But empirical evidence strongly suggests that, at least in chapter 11 reorganization proceedings, preference actions do not fulfill either of these stated goals. Interviews …


Optimal Deterrence And The Preference Gap, Brook E. Gotberg Jan 2018

Optimal Deterrence And The Preference Gap, Brook E. Gotberg

Faculty Publications

This Article is the first of its kind to argue that preference law is ineffective as a deterrent of collection behavior based on empirical evidence, drawn from interviews of actors within the field-debtors, creditors, and the attorneys who represented them in bankruptcy proceedings. This Article reports on interviews of sampled individuals who participated in successful 7 Chapter 11 reorganization cases involving preference actions. The overwhelming and indisputable conclusion from these interviews is that creditors may adjust their behavior in response to preference law, but not in ways that further the purported goal of preference deterrence. Accordingly, if preference law is …