Law Commons^™

Mass Tort Bankruptcy Goes Public, William Organek -- Assistant Professor Of Law

Vanderbilt Law Review

Large companies like 3M, Johnson & Johnson, Purdue Pharma, and others have increasingly, and controversially, turned from multidistrict litigation to bankruptcy to resolve their mass tort liability. While corporate attraction to bankruptcy’s unique features partially explains this evolution, this Article reveals an underexamined driver of this trend and its startling results: government intervention. Governments increasingly intervene in high-profile bankruptcies, forcing firms into insolvency and dictating the outcomes in their bankruptcy cases. Using several case studies, this Article demonstrates why bankruptcy law should subject such governmental actions to greater scrutiny and procedural protections. Governments often assume multiple incompatible roles in these …

In Re Rs Air, Llc.: Bankruptcy - Alter Ego Theory, Paul Henken

Transactions: The Tennessee Journal of Business Law

No abstract provided.

Nipped In The Bud: How Legal Disparities Create Financial Growth Hurdles In The State-Sanctioned Marijuana Industry And Why Bankruptcy Courts Can Provide A Remedy, Caitlyn Cullen

University of Miami Law Review

A new marijuana industry has emerged in the United States in the wake of state-by-state legalization of marijuana, and entrepreneurs, investors, and other advisory services are increasingly viewing the marijuana industry as an area of legitimate business opportunity. However, potential investors have been hesitant to establish formal relationships with marijuana businesses that operate legitimately in the eyes of the state but in a cloud of legal uncertainty at the federal level because the Controlled Substances Act criminalizes marijuana. This Note identifies two economic consequences of the conflicts of state and federal law and suggests a temporary solution that would allow …

Husky International Electronics, Inc. V. Ritz: Rethinking Actual Fraud, Badges Of Fraud, And Pleading Standards In Federal Bankruptcy Litigation, Meagan George

Maryland Law Review

No abstract provided.

Pensions Or Paintings? The Detroit Institute Of Arts From Bankruptcy To Grand Bargain, Maureen B. Collins

University of Miami Business Law Review

This article examines the issues faced by the City of Detroit and the Detroit Institute of Arts when Detroit filed for municipal bankruptcy. Creditors called for the sale of the highly esteemed DIA art collection to pay outstanding municipal pension obligations. The DIA and the Michigan Attorney General viewed the collection not as an asset, but as a charitable public trust. Simply put, the City faced the question of what mattered most – pensions or paintings? Along the way, the parties and courts struggled with valuation of the art collection, a history of judicial decisions and lawmaking regarding charitable trusts …

Commodity Futures Trading Commission V. Weintraub, Thomas R. Himmelspach

Akron Law Review

After presenting a general discussion of the attorney-client privilege, this casenote will discuss the facts underlying Weintraub and then review the rationales of the Seventh Circuit and the Supreme Court in their respective holdings. This casenote will discuss other arguments which have been raised in support of the trustee's authority over the privilege. The casenote will conclude with a discussion of other policy and precedent arguments which urge that the trustee should not be given this authority.

The Bankruptcy-Law Safe Harbor For Derivatives: A Path-Dependence Analysis, Steven L. Schwarcz, Ori Sharon

Washington and Lee Law Review

U.S. bankruptcy law grants special rights and immunities to creditors in derivatives transactions, including virtually unlimited enforcement rights. This Article argues that these rights and immunities result from a form of path dependence, a sequence of industry-lobbied legislative step s, each incremental and in turn serving as apparent justification for the next step, without a rigorous and systematic vetting of the consequences. Because the resulting “safe harbor” has not been fully vetted, its significance and utility should not be taken for granted; thus, regulators, legislators, and other policymakers—whether in the United States or abroad—should not automatically assume, based on its …

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.

Keynote Address: Stories In The Development Of Bankruptcy Law, Gerald F. Munitz

Golden Gate University Law Review

Cite as: 42 Golden Gate U. L. Rev. 539 (2012).

Cleaning The Mess Of The Means Test: The Need For A Case-By-Case Analysis Of 401(K) Loans In Chapter 7 Bankruptcy Petitions, Luke Welmerink

Golden Gate University Law Review

This Comment examines the relevant case law regarding Chapter 7 petitions and the policy implications of not considering 401(k) loan repayment a necessary expense. Section II provides an overview of the treatment of 401(k) loans in bankruptcy, as well as a more detailed review of means testing and an analysis of Other Necessary Expenses. Section III argues that courts should look to the facts and circumstances surrounding petitions to determine whether 401(k) loan repayments can be deducted as necessary expenses, and that doing so will not affect the ability of courts to properly dismiss abusive petitions under a totality-of-the-circumstances analysis. …

Consumer Bankruptcy Reform: Debtors' Prison Without Bars Or "Just Desserts" For Deadbeats?, Robert J. Landry Iii, Nancy Hisey Mardis

Golden Gate University Law Review

This article provides an overview of current bankruptcy law and filing trends in the United States. It then provides an overview of the major changes to consumer bankruptcy and further analyzes several of the more controversial areas of the new law, placing them in historical context and exploring the possible ramifications of these dramatically sweeping changes. Such changes are illustrated by the journey of hypothetical debtors, Ura and Ima Broke, through the new bankruptcy maze. This illustration shows the complexity and inconsistency of the amended Bankruptcy Code. Examining the reform from the vantage point of hypothetical debtors shows how the …

Running The Gauntlet Of "Undue Hardship" - The Discharge Of Student Loans In Bankruptcy, Janice E. Kosel

Golden Gate University Law Review

To remedy supposed abuse, a proposal was made which ultimately was enacted as section 523(a)(8) of the Bankruptcy Reform Act of 1978. Henceforth, such student loans would be dischargeable in bankruptcy only if "such loan first became due before five years. . . before the date of the filing of the petition; or . . . excepting such debt from discharge . . . will impose an undue hardship on the debtor and the debtor's dependents... ' This Article will first examine the legislative history of that provision and then review the case law implementing and interpreting the undue hardship …

Ukrainian Bankruptcy Law In The Context Of Regional And International Developments, Alexander Biryukov

Annual Survey of International & Comparative Law

During the period of Soviet rule there was no need for private law remedies to regulate economic relations, particular in the area of bankruptcy. After the Soviet Union's collapse, former republics and newly independent states started developing market-oriented laws to support democratization process. Due to Ukraine's lack of any bankruptcy legislation during the last century, 1992 marked the starting point of bankruptcy law formation in the country. The formation of bankruptcy laws in Ukraine and other countries in the region may be traced to two stages of development: "first wave" laws passed in 1990 through 1993, and "second wave" laws …

The Bapcpa's Chilling Effect On Debtor's Councel, Alan Eisher

American University Law Review

No abstract provided.

Testing The Limits Of Statutory Construction Doctrines: Deconstructing The 2005 Bankruptcy Act, John Rao

American University Law Review

No abstract provided.

A Few Lines, David G. Epstein

American University Law Review

No abstract provided.

The Innovative German Approach To Consumer Debt Relief: Revolutionary Changes In German Law, And Surprising Lessons For The United States, Jason J. Kilborn

Northwestern Journal of International Law & Business

This Article seeks to achieve two goals as it describes the consumer provisions of the new German Insolvency Act. First, it reveals critical distinctions between the theory of consumer insolvency, as described in German law and legal literature, and the reality of consumer insolvency in practice, as it has developed in the four-and-a-half years since the law went into effect. From both theoretical and practical perspectives, the German experience both supports and challenges many of the notions underlying consumer bankruptcy reform debates in the United States. As it turns out, the German and U.S. consumer debt relief systems produce largely …

The Law Of Last Resort, Barry E. Adler

Vanderbilt Law Review

A financially distressed individual or corporation employs the bankruptcy process only as a last resort. The study of bankruptcy law, however, need not, and should not, be an afterthought. The traditional bodies of law that compose private ordering are the laws of property, contract, and tort. Property law establishes private entitlements that can be specifically enforced against the world. Contract law permits individuals to exchange obligations and thus invest one another with entitlements. Tort law creates its own set of entitlements and imposes liability for unwanted interference with those or other entitlements. These bodies of law are often presented as …

Russia's Intactable Economic Problems And The Next Steps In Legal Reform: Bankruptcy And The Depoliticization Of Business , William P. Kratzke

Northwestern Journal of International Law & Business

Law reform in Russia proceeds on many fronts. This paper takes the position that the most important legal reforms for Russia are those that eliminate the reward system that encourages economic activity that can be highly inefficient. These legal reforms are an effective bankruptcy law and the de-politicization of business. The two go hand-in-hand. It is the politicization of business that renders Russia's bankruptcy laws ineffective by making non-viable business entities .appear to be solvent. These two reforms, were they adequately implemented, would eliminate rewards for inefficiency. Only when the Russian government-and its people-have removed this reward system can conditions …

State Defiance Of Bankruptcy Law, Eric Winston

Vanderbilt Law Review

Bankruptcy is the principal device by which failing businesses and financially-troubled families get one last chance to reorganize their affairs back to financial health. It is also the graveyard for business failures, the place where we bury dead corporations and divide their remaining assets among their surviving creditors. In the last decade, the bankruptcy system has given seven million middle-class families a way to start over-an opportunity to save their homes from foreclosure, rid themselves of overwhelming debts, and reintegrate themselves into the workforce as productive citizens. It has also been the way that 10,000 corporations have restructured their way …

State Defiance Of Bankruptcy Law, Kenneth N. Klee, James O. Johnston, Eric Winston

Vanderbilt Law Review

Bankruptcy is the principal device by which failing businesses and financially-troubled families get one last chance to reorganize their affairs back to financial health. It is also the graveyard for business failures, the place where we bury dead corporations and divide their remaining assets among their surviving creditors.

In the last decade, the bankruptcy system has given seven million middle-class families a way to start over-an opportunity to save their homes from foreclosure, rid themselves of overwhelming debts, and reintegrate themselves into the workforce as productive citizens. It has also been the way that 10,000 corporations have restructured their way …

Behavioral Economics, The Economic Analysis Of Bankruptcy Law And The Pricing Of Credit, Robert K. Rasmussen

Vanderbilt Law Review

Bankruptcy has been a fertile ground for the economic analysis of law. A significant portion of bankruptcy scholarship during the past fifteen years applies the basic assumptions of standard economic theory to the problems caused by financial distress. This scholarship begins with the premise that people make choices in a rational manner in order to maximize their individual utility. It applies this axiom to questions ranging from when do individuals file for bankruptcy to how bankruptcy laws affect firms' investment decisions. As it has in most other areas of law (especially private law), law and economics has both reshaped our …

A Theory Of The Regulation Of Debtor-In-Possession Financing, George G. Triantis

Vanderbilt Law Review

The profile of Chapter 11 of the Bankruptcy Code in public consciousness has surged recently. Other than the automatic stay on the enforcement of claims, the most publicized feature of bankruptcy reorganizations is debtor-in-possession (DIP) financing. Indeed, along with the bankruptcy stay, DIP financing is the motivation for many Chapter 11 filings. Under Section 364 of the Code, a firm in bankruptcy (the debtor in possession) can finance its ongoing operations and investments by issuing new debt that enjoys any one of various levels of priority, all of which rank higher than the firm's prepetition unsecured debt.' The debtor's financing …

The Rejection Of Executory Contracts Under The Intellectual Property Bankruptcy Protection Act Of 1988, John J. Fry

Cleveland State Law Review

In October of 1988, Congress enacted the Intellectual Property Bankruptcy Protection Act. The Act is intended to "promote the development and licensing of intellectual property by providing certainty to licensees in situations where the licensor files bankruptcy and seeks to reject the license as an executory contract by providing the licensee an "assurance of being able to continue to use the licensed intellectual property after rejection, while debtors/licensors will still be able to free themselves of burdensome obligations." The Act adds a new subsection to 11 U.S.C. §365 which allows the licensee of intellectual property under an executory contract to …

Bankruptcy Law Of The People's Republic Of China: Principle, Procedure & Practice, Henry R. Zheng

Vanderbilt Journal of Transnational Law

The Enterprise Bankruptcy Law of the People's Republic of China (For Trial Use) (the National Act), promulgated on December 2, 1986, is the first bankruptcy legislation applicable nationwide in the People's Republic of China (PRC or China). At the same time, some regional governments have also enacted regional bankruptcy laws with very limited geographic application. The National Act applies only to state-owned Chinese enterprises, while one regional bankruptcy regulation applies exclusively to foreign investment enterprises." The PRC thus has developed two parallel bankruptcy regimes. The introduction of a bankruptcy system in China represents a significant development in the economic relationship …

Creditor Equality In Transnational Bankruptcies: The United States Position, Ulrich Huber

Vanderbilt Journal of Transnational Law

In addition to giving a fresh start to the debtor, a primary goal of bankruptcy law (at least of liquidation bankruptcy) is to distribute equally the debtor's assets to his creditors. Although the Bankruptcy Reform Act of 1978 and its 1984 Amendments (collectively "the Code") provide many ways of achieving this goal in domestic bankruptcies, these methods often prove to be of little help when a debtor's assets are located in more than one country.

Equality of creditors regardless of their origin, however, is considered essential for the development of international trade. International trade has grown substantially, if not explosively, …

The Undersecured Creditor In Reorganizations And The Nature Of Security, Theodore Eisenberg

Vanderbilt Law Review

For better or for worse, bankruptcy law generally recognizes secured creditors' state law rights in collateral. The decision to honor secured creditors' state law interests and the need to modify those interests in bankruptcy generate an essential tension of bankruptcy law. Much of the Bankruptcy Act's complexity and several of its most controversial provisions arise from congressional efforts to resolve this tension.

In trying to walk the fine line between taming and preserving secured creditors' rights, Congress created one of the most extraordinary provisions in the history of bankruptcy law. Section 1111(b) of the Bankruptcy Act of 19781 suspends two …

Title Iii Of The Bankruptcy Amendments Act Of 1984: The Substantive Changes, Lucinda Mcdaniel

University of Arkansas at Little Rock Law Review

No abstract provided.

Lifting The Cloud Of Uncertainty Over The Repo Market: Characterization Of Repos As Separate Purchases And Sales Of Securities, William F. Hagerty, Iv

Vanderbilt Law Review

In light of the actual and potential financial harm that repo investors faced after failures of several repo market participants,this Note proposes a new legal characterization of repos and argues for adoption of proposed Bankruptcy Code amendments pertaining to repos. Both of these suggestions would give repo investors significant future financial protection without destroying the financially attractive characteristics of repurchase agreements.

Part II of this Note begins laying the foundation for this proposal by discussing current repo market problems that the failures of several repoissiers have exposed.

Part II discusses new policies concerning the appropriate uses of the collateral securities …

Efficiency Justifications For Personal Property Security, James J. White

Vanderbilt Law Review

It is always more interesting to challenge the received wisdom than to defend it. Yet in this case, a careful analysis of the facile assertions about the expansion of credit by the granting of security and about the other presumed efficiencies of security produces arguments and evidence that strengthen rather than weaken the efficiency arguments. In the first place, it appears that the granting of security does in fact expand the credit granted to risky debtors and thus that any efficiency equation must consider the probable benefits of such expansion. Second, a close examination of the actual experience not only …