Bankruptcy Law Commons^™

The Bankruptcy Of Golfers' Warehouse, Inc.: A Lesson In How To Sell A Business In Chapter 11, Briton Collins, Will Smith, David Choi

David Y Choi

No abstract provided.

Bankruptcy Federalism: A Doctrine Askew, Margaret Howard

Lyman P. Q. Johnson

No abstract provided.

The Chapter 11 Efficiency Fallacy, Diane Lourdes Dick

Faculty Articles

This article challenges the persistent claim that Chapter 11's increasing utilization of market mechanisms will help facilitate economically efficient resolutions of corporate financial distress. Using two recent case studies, this article shows that, in fact, these mechanisms are used by stakeholders with existing market power to take control of the restructuring process and extract rents at the expense of other constituents: creditors, equity holders, and—in the case of companies that receive governmental bailouts—taxpayers. These distortionary effects are obscured by a dominant, neoclassical legal paradigm that ignores institutional and political dynamics. This article advances a new explanatory model that draws upon …

Preferences Are Public Rights, Brook E. Gotberg

Faculty Publications

In the wake of the Supreme Court’s decision in Stern v. Marshall, there is widespread uncertainty as to what other proceedings may constitutionally fall within a bankruptcy court’s core jurisdiction. Supreme Court jurisprudence has been cryptic regarding the constitutional limitations of non-Article III courts, but the Court has identified a "public rights exception" to the general rule that the judicial power must be exercised only by judges with life tenure and salary protection. This public rights exception has not yet been explicitly extended to a bankruptcy proceeding, but the reasoning of the Court strongly suggests that a trustee’s motion to …

The Virtue In Bankruptcy, Matthew Adam Bruckner

Matthew Adam Bruckner

In response to a gap in the corporate bankruptcy literature, this Article offers a new positive theory of corporate bankruptcy law based on virtue ethics. The dominant theory of corporate bankruptcy law—the creditors’ bargain model—is necessarily incomplete because it does not account for bankruptcy courts’ equitable and discretionary powers, or for bankruptcy courts’ need to consider decision-making criteria other than economic efficiency. By contrast, virtue ethics offers insights about these features of corporate bankruptcy law for at least three reasons. First, bankruptcy courts appear to give content to bankruptcy laws by using virtue ethical principles. Second, virtue ethics’ decision-making process—practical …

The Bankruptcy Puzzle, Margaret F. Brinig, F. H. Buckley

Margaret F Brinig

This article offers new evidence on the determinants of U.S. consumer bankruptcy filing rates, which tripled from 1984 to 1991. The run-up in filing rates does not appear to be a consequence of legal changes since the increase coincided with Bankruptcy Code amendments designed to reduce filing rates by rejecting opportunistic petitions. The run-up also coincided with a major economic boom and crested with the 1991 recession. However, much of the variation in district filing rates is attributable to differences in social variables, and we suggest that changes in social norms might account for the increased bankruptcy filings. This article …

The Unlucky Penny: How $0.01 In Collateral Value Can Limit The Debtor's Ability To Strip Off A Junior Mortgage In A Chapter 7 Bankruptcy Proceeding, Keri Mahoney

Touro Law Review

No abstract provided.

Activist Investors, Distressed Companies, And Value Uncertainty, Michelle M. Harner, Jamie Marincic Griffin, Jennifer Ivey-Crickenberger

Michelle M. Harner

Hedge funds, private equity firms, and other alternative investment funds are frequently key players in corporate restructurings. Most commentators agree that the presence of a fund can change the dynamics of a chapter 11 case. They cannot agree, however, on the impact of this change—i.e., do funds create or destroy enterprise value? This essay contributes to the dialogue by analyzing data from chapter 11 cases in which funds are in a position to influence the debtor’s exit strategy. The data shed light on what such funds might achieve in chapter 11 cases and the potential implications for debtors and their …

Suffolk County Resident Arrested For Grand Larceny For Stealing Televisions From Walmart, Shawn R. Kassman

Shawn R Kassman

Man was arrested in Suffolk County in the town of East Setauket and charged with fourth-degree grand larceny. Police said he put 55-inch television in a shopping cart at Walmart in East Setauket and left the store through the garden area.command was probably charged with grand larceny because the item was greater than $1000. If you take an item that is more than thousand dollars you will be charged with grand larceny. Typically if the merchandise is less than $1000 one would be charged with shoplifting also called petit larceny.

f you have New York Criminal Law related questions, please …

A Capital Market, Corporate Law Approach To Creditor Conduct, Mark J. Roe, Frederico Cenzi Venezze

Michigan Law Review

The problem of creditor conduct in a distressed firm—-for which policymakers ought to have the distressed firm’s economically sensible repositioning as a central goal—-has vexed courts for decades. Because courts have not come to coherent, stable doctrine to regulate creditor behavior and because they do not focus on building doctrinal structures that would facilitate the sensible repositioning of the distressed firm, social costs arise and those costs may be substantial. One can easily see why developing a good rule here has been hard to achieve: A rule that facilitates creditor intervention in the debtor’s operations beyond the creditor’s ordinary collection …

Central Falls Retirees V. Bondholders: Assessing Fear Of Contagion In Chapter 9 Proceedings, Maria O'Brien

Faculty Scholarship

Modern Chapter 9 litigation has been characterized by extraordinary protections for municipal bondholders, and Central Falls is no exception. Although not well understood by politicians, fear of contagion has encouraged the adoption of legal arrangements that have limited the bankruptcy courts’ ability to include bondholders in the cost of restructuring municipal debt. This preference for bondholders (and, by extension, their insurers) has meant increased misery for taxpayers and retirees. Given that all of these actors appear to have been complicit to some degree in the creation and maintenance of the fiscally imprudent conditions that triggered bankruptcy and that evidence of …

Breaking Bankruptcy Priority: How Rent-Seeking Upends The Creditors' Bargain, Frederick Tung, Mark J. Roe

Faculty Scholarship

Bankruptcy reallocates value in a faltering firm. The bankruptcy apparatus eliminates some claims and alters others, leaving a reduced set of claims to match the firm’s diminished capacity to pay. This restructuring is done according to statutory and agreed-to contractual priorities, so that lower-ranking claims are eliminated first and higher ranking ones are preserved to the extent possible. Bankruptcy scholarship has long conceptualized this reallocation as a hypothetical bargain among creditors: creditors agree in advance that if the firm falters, value will be reallocated according to a fixed set of predetermined rules and contracts. In any given reorganization case, creditors …

Can Pensions Be Restructured In (Detroit’S) Municipal Bankruptcy?, David A. Skeel Jr.

All Faculty Scholarship

This paper, which was written as a White Paper for the Federalist Society, describes and assesses the question whether public employee pensions can be restructured in bankruptcy, with a particular focus on Detroit. Part I gives a brief overview both of the treatment of pensions under state law, and of the Michigan law governing the Detroit pensions. Part II explains the legal argument for restructuring an underfunded pension in bankruptcy. Part III considers the major federal constitutional objections to restructuring, Part IV discusses arguments based on the Michigan Constitution, and Part V assesses several Chapter 9 arguments against restructuring. None …

What Is A Return -- The Long Slow Fight In The Bankruptcy Courts, T. Keith Fogg

T. Keith Fogg

This article examines what constitutes a return within the context of a bankruptcy for purposes of allowing a taxpayer to discharge the tax debt.

"Shut Up. Pay More. This Is What You Voted For." Why You Don't See Me At San Francisco's Hall Of Justice., David D. Butler

David D. Butler

This 2,285 essay combines California's often violent history with European and American high and low culture to explain my decision to leave San Francisco in the 1970's and to study and practice law in other states. At the time, I was platflorm man (operator) on the 30 Stockton electric trolley through South of Market, the Financial District, Chinatown, Pacific Heights, and the Marina. Nevertheless, at the time the Nation of Islam had at least one armed group, the Zebra killers, murdering Whites, often slowly with machetes. I joined the White, Middle-Class, Taxpaying majority in their diaspora to safer places. My …

Too Complex To Perceive?: Drafting Cash Distribution Waterfalls Directly As Code To Reduce Complexity And Legal Risk In Structured Finance, Master Limited Partnership, And Private Equity Transactions, Ralph Carter Mayrell

Ralph Carter Mayrell

The intricate procedural and data-driven decision trees that play a critical role in complex financial contracts like cash distribution waterfalls in structured finance agreement indentures (e.g., collateralized debt obligations (CDOs)), master limited partnership agreements, and private equity fund agreements are inefficiently depicted as written contracts. As Professor Henry Hu explains in Too Complex to Depict?, the difficulty of translation—or depiction—between original mathematical models, plain English prospectuses, legal contracts, and programmed execution means that often the written depictions that form the basis of disclosures do not accurately define the act of execution. To overcome this, the SEC proposed an amendment to …

Trasformazione In S.A.S., Cessione Della Quota E Fallimento In Estensione Dell'accomandatario, Valerio Sangiovanni

Valerio Sangiovanni

No abstract provided.

Iflas And Chapter 11: Classical Islamic Law And Modern Bankruptcy, Abed Awad, Robert E. Michael

Robert E. Michael

There is no question that the orderly development of Islamic finance will require finding ways to amalgamate the classical Islamic law of bankruptcy with the needs of the modern Islamic finance industry. The unreasonable reliance on ever-expanding opportunities has disappeared along with the global credit markets. It is therefore inescapable that loss scenarios must be dealt with. That in turn means effective bankruptcy laws. We hope this article will help foster the effort.

Bankruptcy, James D. Walker Jr., Amber Nickell, Tim Colletti

Mercer Law Review

This Article focuses on bankruptcy opinions issued in 2012 by the courts in the Eleventh Circuit. The topics are varied, ranging from the constitutionality of bankruptcy-specific exemption schemes enacted by the states to the ever-growing body of law arising from the means test.

Bankruptcy And Economic Recovery, Thomas H. Jackson, David A. Skeel Jr.

All Faculty Scholarship

To measure economic growth or recovery, one traditionally looks to metrics such as the unemployment rate and the growth in GDP. And in terms of figuring out institutional policies that will stimulate economic growth, the focus most often is on policies that encourage investment, entrepreneurial enterprises, and reward risk-taking with appropriate returns. Bankruptcy academics that we are, we tend to add our own area of expertise to this stable— with the firm belief that thinking critically about bankruptcy policy is an important element of any set of institutions designed to speed economic recovery. In this paper, written for a book …

Hidden In Plain View: The Pension Shield Against Creditors, Patricia E. Dilley

Patricia E Dilley

No abstract provided.

Capital Structure, Creditor Composition, And Insolvency Law In Japan, Benjamin T. Jones

Washington International Law Journal

This article identifies potential relationships between the methods by which large firms in the business sector are externally financed and creditors’ determinations to resolve business failure through private negotiation or formal insolvency proceedings. Prior to the deregulation of Japan’s capital markets in the 1980s, large firms relied heavily on bank debt as a source of external capital. Consequently, their capital structures and their creditor compositions were relatively homogenous. Japanese banks appeared to primarily resolve the failure of their borrowers through private reorganizations or liquidations rather than court proceedings, and evidence suggests that creditor homogeneity was a favorable condition for the …

Third Time's The Charm: The Coming Impact Of The Restatement (Third) Restitution And Unjust Enrichment In Bankruptcy, C. Scott Pryor

Pepperdine Law Review

Bankruptcy courts have frequently been characterized as courts of equity. Often this characterization has accompanied unusually relaxed interpretation or application of a provision of the Bankruptcy Code. However, this understanding does not exhaust the meaning of equity in bankruptcy. Historically, equity covered a large range of topics–trusts and estates, injunction, contracts, specific performance, unjust enrichment, restitution, and disgorgement. In addition, equity was not limited to particular remedies. Equity’s remedies certainly included money damages but recognized many more. The law of equity was substantive as well as remedial; it recognized primary rights as well as secondary rights of rectification. Among equity's …

Teaching Business Law Through An Entrepreneurial Lens, Michelle M. Harner

Michelle M. Harner

The legal market has changed. Although change creates uncertainty and fear, it also can create opportunity. This essay explores the opportunity for innovation in the business law curriculum, and the role of simulation to help create more practice-aware new lawyers.

Debtor's Defense To A Deficiency Judgment Under Ucc , Gail Clifford Hutton

Pepperdine Law Review

No abstract provided.

Cross-Border Bankruptcy And The Cooperative Solution, Leah Barteld

Brigham Young University International Law & Management Review

No abstract provided.

How Long Is Forever This Time? The Broken Promise Of Bankruptcy Trusts, S. Todd Brown

Journal Articles

Bankruptcy trusts consistently fail to protect the interests of future claimants as contemplated by Section 524(g) of the Bankruptcy Code. Although this reality is generally understood, the extent of this failure has not been examined. And, as demonstrated in this study, the degree to which trusts are failing future victims is greater than commonly realized. More than two-thirds of the trusts that have completed their initial claims processing are paying new asbestos personal injury victims at or near historically low rates, and several others appear to be defunct or inactive. Nearly two-thirds of the trusts that remain active have reduced …

Adjudication Under The Bankruptcy Amendments Of 1984: An Examination Of Congressional Response To The Northern Pipeline Decision, John M. Evans

Journal of the National Association of Administrative Law Judiciary

No abstract provided.

Liquid Assets: A Coasian Economic Analysis Of Oregon's Allocation Of Conserved Water Program, Richard A. Grisel

Richard A Grisel

Diversions for residential, agricultural, recreational, commercial, industrial, and other beneficial uses have had the effect of removing water from rivers and tributaries throughout the western U.S. Another, more recent, competing use is ecological, demonstrated by the legal recognition of instream beneficial uses in some jurisdictions. As awareness of the progressively acute need for reallocation has increased in the arid West, so has interest in water markets and other mechanisms to facilitate transfers across beneficial uses. However, governments and water users face a legacy prior appropriation system that prohibits instream beneficial uses, encourages maximal diversion, stifles water right fungibility, and generally …

A Skeptic’S Case For Sovereign Bankruptcy, Anna Gelpern

Georgetown Law Faculty Publications and Other Works

This essay describes fundamental flaws in the sovereign debt restructuring regime, but questions the prevailing arguments for sovereign bankruptcy. The author concludes that efficient debt outcomes may well come about without bankruptcy, but that a statutory regime is necessary to achieve sovereign autonomy and political legitimacy.