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Full-Text Articles in Bankruptcy Law
The Curious Policy Implications Of In Re Semcrude: Do Crude Oil Markets Need A Volcker Rule?, Joseph A. Schremmer
The Curious Policy Implications Of In Re Semcrude: Do Crude Oil Markets Need A Volcker Rule?, Joseph A. Schremmer
Faculty Scholarship
In the summer of 2008 the nation's largest and fastest growing midstream crude oil purchaser, SemCrude, declared bankruptcy. SemCrude's demise was not the result of a bear market but of its taste for risky options trading. The bankruptcy pitted the competing liens of thousands of unpaid oil and gas producers and royalty owners who sold their crude oil to SemCrude at the wellhead against those of SemCrude's lenders and the claims of downstream purchasers. The Bankruptcy Court for the Federal District of Delaware found none of the producers' lien rights to be perfected under applicable law and awarded priority to …
Beyond Bankruptcy: Resolution As A Macroprudential Regulatory Tool, Steven L. Schwarcz
Beyond Bankruptcy: Resolution As A Macroprudential Regulatory Tool, Steven L. Schwarcz
Faculty Scholarship
To try to protect the stability of the financial system, regulators and policymakers have been extending bankruptcy-resolution techniques beyond their normal boundaries. To date, however, their efforts have been insufficient, in part because bankruptcy law traditionally has microprudential goals (to protect individual firms) whereas protecting financial stability is a “macroprudential” goal.
This Article seeks to derive a logical and consistent theory of how and why resolution-based regulation can help to stabilize the financial system. To that end, the Article identifies three possible regulatory approaches: reactive resolution-based regulation, which comprises variations on traditional bankruptcy; proactive resolution-based regulation, which consists of pre-planned …