Law Commons^™

Rethinking Antebellum Bankruptcy, Rafael I. Pardo

Scholarship@WashULaw

Bankruptcy law has been repeatedly reinvented over time in response to changing circumstances. The Bankruptcy Act of 1841—passed by Congress to address the financial ruin caused by the Panic of 1837—constituted a revolutionary break from its immediate predecessor, the Bankruptcy Act of 1800, which was the nation’s first bankruptcy statute. Although Congress repealed the 1841 Act in 1843, the legislation lasted significantly longer than recognized by scholars. The repeal legislation permitted pending bankruptcy cases to be finally resolved pursuant to the Act’s terms. Because debtors flooded the judicially understaffed 1841 Act system with over 46,000 cases, the Act’s administration continued …

Error-Resilient Consumer Contracts, Danielle D'Onfro

Scholarship@WashULaw

When firms contracting with consumers make mistakes, people get hurt. Inaccurate billing, misapplied payments, and similar problems push lucky consumers into kafkaesqe customer-service queues and unlucky ones off the financial cliff. Despite significant regulatory interventions, firms contracting with consumers continue to struggle to accurately bill customers, update accounts, and process payments. Firms largely rely on technology, especially databases and software, to discharge these servicing obligations. This technology must accommodate firms’ innovations in their contracts, shifting regulations, and unpredictable consumer behavior. Given the complexity of servicing, the technology will inevitably produce mistakes even when firms invest in technology. When firms skimp …

Asset Partitioning And Financial Innovation, Christopher Bruner

Scholarly Works

Review of the article by Ofer Eldar and Andrew Verstein titled “The Enduring Distinction between Business Entities and Security Interests”, 92 Southern California Law Review, no. 2 (2019).

Book Review: Global Lawmakers: International Organizations In The Crafting Of World Markets By Susan Block-Lieb And Terence C. Halliday, Melissa J. Durkee

Scholarly Works

Susan Block-Lieb and Terence Halliday gradually build up an empirically grounded, meticulously realized argument that individual lawmakers matter. When one allows facts to inform theory rather than the other way around, the authors show, what becomes clear is that individual lawmakers are not just governmental delegates, but a whole variety of professionals, industry association representatives, and others with some stake in the lawmaking process. These actors work not just through formal processes, but also through an array of informal ones. Most importantly, their presence matters to the content of the legal norms that take hold around the world. The book …

Limited Liability Property, Danielle D'Onfro

Scholarship@WashULaw

This Article offers a theory of secured credit that aims to answer fundamental questions that have long percolated in the bankruptcy and secured transactions literatures. Are security interests property rights, contract rights, or something else? Why do secured creditors enjoy a priority right that, in bankruptcy, requires them to be paid in full before other debt holders recover anything? Should we care that secured credit creates distributional unfairness when companies cannot pay their debts?

This Article argues that security interests are best understood as a form of “limited liability property.” Limited liability—the privilege of being legally shielded from liability that …

Limited Liability Property, Danielle D'Onfro

Scholarship@WashULaw

This Article offers a theory of secured credit that aims to answer fundamental questions that have long percolated in the bankruptcy and secured transactions literatures. Are security interests property rights, contract rights, or something else? Why do secured creditors enjoy a priority right that, in bankruptcy, requires them to be paid in full before other debt holders recover anything? Should we care that secured credit creates distributional unfairness when companies cannot pay their debts?

This Article argues that security interests are best understood as a form of “limited liability property.” Limited liability—the privilege of being legally shielded from liability that …

Reforming The True-Sale Doctrine, Heather Hughes

Articles in Law Reviews & Other Academic Journals

No abstract provided.

An Historical Overview Of Ucc Article 9, Peter Winship

Faculty Journal Articles and Book Chapters

This book chapter traces the history of Article 9 (Secured Transactions) of the U.S. Uniform Commercial Code. After setting out the pre-1940 legal setting in the United States for the use of movable property in secured transactions, the chapter studies three stages in the evolution of Article 9: (1) the drafting of the first “official” text (1947-1951), (2) the continuing revision of the text and its slow adoption by states (1952-1990), and (3) the thorough-going revision that lead to the present 1998 official text and subsequent minor amendments (1990-present). The chapter notes the growing complexity of the text and the …

What Your Lender And Mortgage Broker Didn’T Tell You: , George W. Kuney

College of Law Faculty Scholarship

California Code of Civil Procedure § 580b protects a California homeowner from a deficiency judgment when the homeowner’s purchase-money lender forecloses upon the home after default. In other words, if the price the lender realized at the foreclosure sale is less than the outstanding amount of the debt, the homeowner will not be liable for the deficiency. Section 580b was enacted to discourage the purchase money lenders from over-valuing real property by requiring a lender to look solely to the collateral’s value for recovery in the event of foreclosure, and to prevent the aggravation of an economic downturn caused by …

Do Lawyers And Law Professors Have Any Comparative Advantages In Opining On Financial Regulation Reform?, Kenneth Anderson

Articles in Law Reviews & Other Academic Journals

American University, WCL Research Paper 10-22Abstract:This short essay addresses a worry sometimes at the back of the minds of financial lawyers and law-and-finance scholars seeking to intervene in the debate over financial regulation reform in the wake of the financial crisis of 2007-09. As lawyers and law professors, what - if anything - do we have to contribute to the debate? Are the fundamental questions of the financial crisis not economic in a professional and disciplinary sense? Questions that require formal disciplinary skills and training in economics in order to be able formulate positions on the fundamental issues, in which …

The Economics Of Deal Risk: Allocating Risk Through Mac Clauses In Business Combination Agreements, Robert T. Miller

Working Paper Series

In any large corporate acquisition, there is a delay between the time the parties enter into a merger agreement (the signing) and the time the merger is effected and the purchase price paid (the closing). During this period, the business of one of the parties may deteriorate. When this happens to a target company in a cash deal, or to either party in a stock-for-stock deal, the counterparty may no longer want to consummate the transaction. The primary contractual protection parties have in such situations is the merger agreement’s “material adverse change” (MAC) clause. Such clauses are heavily negotiated and …

Five Decades Of Corporation Law - From Conglomeration To Equity Compensation, Richard A. Booth

Working Paper Series

This brief essay recounts developments in corporation law over the last fifty years. It begins with the rise of finance capitalism and the conglomerate corporation which was followed by the emergence of hostile takeovers in the late 1970s and 1980s. One of the key events in this saga was the February 1, 1983 decision by the Delaware Supreme Court in Weinberger v. UOP, Inc. that effectively permitted the at-will elimination of minority stockholders through cashout mergers. Takeovers were also facilitated by two major financial developments: (1) the growth of institutional investors coupled with the growing taste of diversified investors for …

The Paulson Report Reconsidered: How To Fix Securities Litigation By Converting Class Actions Into Issuer Actions, Richard A. Booth

Working Paper Series

This short essay considers the findings and recommendations of the Paulson Report relating to securities fraud class actions under the 1934 Act and Rule 10b-5. While the report exposes numerous problems with securities litigation in the United States, it understates the problems inherent in stock-drop actions. As a result, the report fails to propose an effective fix. As the report recognizes, diversified investors gain nothing from stock-drop actions: Because the corporation pays, holders effectively reimburse buyers and sellers keep their gains. In other words, the system suffers from circularity akin to a game of musical chairs in that stock-drop actions …

The Duty To Creditors Reconsidered - Filling A Much Needed Gap In Corporation Law, Richard A. Booth

Working Paper Series

The most fundamental question of corporation law is to whom does the board of directors of a corporation owe its fiduciary duty. Recently, the question has tended to be whether and under what circumstances the board of directors has the duty to maximize stockholder wealth. But if a corporation is insolvent (or close to it), business decisions designed to maximize stockholder wealth may result in a reduction of creditor wealth. Although the conventional wisdom is that creditors must protect themselves by contractual means, there is a substantial body of case law that says that creditors can assert claims sounding in …

Modernizing The Law Of Secured Transactions: Nonuniform Provisions Of Georgia's Revised Article 9, James C. Smith

Scholarly Works

Article 9 of the Uniform Commercial Code governs secured transactions in personal property and fixtures. In 1990, the sponsors of the U.C.C. launched a major revision project, which culminated in Revised Article 9. Judged by the marketplace of state legislatures, the project turned out to be a remarkable success story of law reform. Between 1998 and 2001, all fifty states plus the District of Columbia enacted Revised Article 9. In Georgia, the revision process began in 1999 with the State Bar of Georgia's appointment of the Revised Article 9 Subcommittee of the Business Law Section. The seventeen-member committee, composed of …

Secured Credit And Insolvency Law In Argentina And The U.S.: Gaining Insight From A Comparative Perspective, Guillermo A. Moglia Claps, Julian B. Mcdonnell

Scholarly Works

It is not the purpose of this study to argue for or against changes in the secured credit or insolvency law of Argentina or the U.S. The perpetual clash of interested noted by James Madison and the contemporary pressures of the global economy are likely to assure that these areas of law will be subject to continuing scrutiny in both countries. Instead, we first urge that the law governing the creation and enforcement of security devices and the way in which insolvency laws impact these devices be considered together as part of one system of financing. The power which secured …

A Glance At The New Article 9 Secured Transaction, Nathalie Martin, Frederick M. Hart

Faculty Scholarship

Those of us who teach a course on Article 9 of the Uniform Commercial Code (Secured Transactions) dreaded the approach of July I, 2001. On that day, a revised version of Article 9 became effective in New Mexico and most other states. The old notes had to be discarded. New materials had to be prepared, or at least the old ones had to be revised. Perhaps there would be some excitement in learning what the drafters had done, but more obvious was the effort needed to learn something new. Maybe it was time to retire. We have now taught the …

Framing The Inquiry: The Social Impact Of Project Finance, Lissa Lamkin Broome

Faculty Publications

No abstract provided.

Proposal For A Centralized And Integrated Registry For Security Interests In Intellectual Property, William J. Murphy

Law Faculty Scholarship

As the world economy enters the twenty-first century, job and wealth creation is increasingly based on innovation and creativity that, in turn, can give rise to important intellectual property rights. For many companies and individuals these intellectual property rights may represent their most valuable assets, or in some cases, their only valuable assets. As a result, intellectual property rights increasingly play a critical the role in financing.

Unlocking the job and wealth creating potential of intellectual property assets requires putting these assets into use, and that often requires a capital investment. Unfortunately, many entrepreneurs and innovators lack the capital necessary …

Revised Article 9 Meets The Bankruptcy Code: Policy And Impact, (With C. Mooney, Jr.)., Steven L. Harris

All Faculty Scholarship

No abstract provided.

Filing And Enforcement Under Revised Article 9, (With C. Mooney, Jr.)., Steven L. Harris

All Faculty Scholarship

No abstract provided.

How Successful Was The Revision Of U.C.C. Article 9?: Reflections Of The Reporters,(With C. Mooney, Jr.)., Steven L. Harris

All Faculty Scholarship

No abstract provided.

Choosing The Law Governing Perfection: The Data And Politics Of Article 9 Filing, (With C. Mooney, Jr.). , Steven L. Harris

All Faculty Scholarship

No abstract provided.

Negotiability, Electronic Commercial Practices, And A New Structure For The Ucc Article 9 Filing System: Tapping The Private Market For Information Technology, (With C. Mooney, Jr.). , Steven L. Harris

All Faculty Scholarship

No abstract provided.

Abolish The Article 9 Filing System, Peter A. Alces

Faculty Publications

No abstract provided.

The Value Of Public-Notice Filing Under Uniform Commercial Code Article 9: A Comparison With The German Legal System Of Securities In Personal Property, Jens Hausmann

LLM Theses and Essays

In contrast to the public-notice filing system under U.C.C. Article 9, the modern German law of securities in personal property lacks publicity of security interests. The German courts have developed a mesh of priority rules exhaustively described in this analysis. Despite the costs and risks arising under the formal filing system, the U.C.C. accomplishes a preferable balance of interests involved in secured transactions. It assures certainty to creditors about the priority of security interests in particular assets, whereas the German law comprehensively recognizes the debtor’s interest in the secrecy of the transaction and the need for external capital. Regarding the …

Certainty, Efficiency, And Realism: Rights In Collateral Under Article 9 Of The Uniform Commercial Code, Margit Livingston

College of Law Faculty

Article 9 of the Uniform Commercial Code requires that the debtor have "rights in the collateral" for the attachment of a security interest. The drafters, however, left the determination of the phrase's meaning to the courts. This article argues that the requirement of "rights in the collateral" is unnecessary as it relates to tangible goods and should be deleted from Article 9. As an alternative to the uncertainty engendered by the phrase, the article proposes substituting a set of notice and priority rules that more clearly define the rights and obligations of the parties undertaking an Article 9 transaction involving …

A Property-Based Theory Of Security Interests: Taking Debtors' Choices Seriously, (With C. Mooney, Jr.). , Steven L. Harris

All Faculty Scholarship

No abstract provided.

A Property-Based Theory Of Security Interests: Taking Debtor's Choices Seriously, Steven L. Harris, Charles W. Mooney Jr.

All Faculty Scholarship

No abstract provided.

Using Fundamental Principles Of Commercial Law To Decide Ucc Cases, , Steven L. Harris

All Faculty Scholarship

No abstract provided.