Law Commons^™

Bank Resolution And Creditor Distribution: The Tension Shaping Global Banking –Part Ii: The Cross-Border Dimension, David Ramos, Javier Solana

University of Miami Business Law Review

New bank resolution frameworks that aim to address the complex task of managing the collapse of a large financial institution stand in considerable tension with basic principles and policy objectives of insolvency law. In this two-part study, we present an analytical framework that aims at helping us understand how this tension can undermine the effectiveness of the new bank resolution frameworks. In the first part of this article, we introduced our three-layered framework and explored its first two layers: the group dimension, and the duality of crisis-prevention and crisis-management tools. In this Part II, we explore the last layer: the …

Bankruptcy For Cannabis Companies: Canada’S Newest Export?, Stephanie Ben-Ishai

University of Miami International and Comparative Law Review

No abstract provided.

Resolving Corporate Insolvencies In China: The Gap Between Law And Reality, Dr. Zhang Zinian

University of Miami International and Comparative Law Review

This article examines how corporate insolvencies in China, the second largest economy, are handled under the current legislation, the China Enterprise Bankruptcy Law of 2006. Relying on the fresh empirical data arising from the first ten years on the use of China’s three insolvency procedures, reorganization, composition and liquidation, this article reveals the huge gap between the law in the books and the law in action, arguing that the implementation of this law in China perhaps has not achieved the legislative objectives. The constitutional and institutional weaknesses affecting the application of this law are analyzed

Small Business And Bankruptcy: Recent Changes In Kosovo And The United States Compared, Bruce A. Markell

University of Miami International and Comparative Law Review

United States, small businesses account for 99.7% of all employers, and about 47.3% of private sector employment.1 In the European Union (EU) non-financial business sector, SMEs accounted for 99.8% of all enterprises.2 These enterprises employed almost ninety-eight million people—66.6% of total employment—in the EU.

SMEs are variously defined. In the United States, until recently the definition of an SME was an enterprise that employed less than 500 individuals.4 In the EU, SMEs are defined as businesses which employ less than 250 staff and have an annual turnover of less than €50 million, or whose balance sheet total is less than …

The Low Usage Of Bankruptcy Procedures: A Cultural Problem? Lessons From Spain, Aurelio Gurrea-Martínez

University of Miami International and Comparative Law Review

While filing for bankruptcy does not seem appealing for any debtor regardless of the jurisdiction, the reluctance to use the bankruptcy system varies across countries. This article explores the underlying reasons and economic effects of the low usage of bankruptcy procedures in Spain, where the rate of business bankruptcies is one of the lowest in the world. Some authors have argued that the low usage of bankruptcy procedures in Spain is due to a “cultural” problem faced by Spanish entrepreneurs. According to this hypothesis, the lack of a “bankruptcy culture” makes Spanish entrepreneurs afraid to use the bankruptcy system. In …

Impact Of The Italian Business Crisis And Insolvency Code On Organizational Structures In Msmes, Alessandra Zanardo

University of Miami International and Comparative Law Review

In September 2021, the Italian Bankruptcy Law will be replaced by a new comprehensive Act, the so-called Business Crisis and Insolvency Code.

Two topics have immediately become the “mantra” of this important reform: a) the introduction into the domestic legal framework of early warning tools and alert procedures, along the lines of the French experience; and b) the introduction of a specific obligation on the entrepreneur or the management body of collective entities to implement suitable measures or establish appropriate organizational structures to prevent future insolvency and preserve the business continuity.

These measures are closely related, insofar as the obligation …

Value Tracing And Priority In Cross-Border Group Bankruptcies: Solving The Nortel Problem From The Bottom Up, Edward J. Janger, Stephan Madaus

University of Miami International and Comparative Law Review

No abstract provided.

Cryptocurrencies, Cybersecurity And Bankruptcy Law: How Global Issues Are Globalizing National Remedies, Renato Mangano

University of Miami International and Comparative Law Review

The market for cryptocurrencies is interspersed with cases of loss, theft and fraud and a new transnational practice in bankruptcy law is emerging whereby cryptocurrency exchanges compensate the injured users on a collective basis. This paper will argue: first, that this trend has transplanted into Asia and Europe the US idea according to which bankruptcy law can be employed to avoid mass litigation; secondly, that this trend has transcended the debate about the characterization of digital assets, including the concerns of those scholars who maintain that digital coins cannot be objects of property; and thirdly that – since this practice …

Grab The Fire Extinguisher Comparing Uk Schemes Of Arrangement To U.S. Corporate Bankruptcy After Jevic, David S. Stevenson

Cleveland State Law Review

Corporations overwhelmed with debt frequently turn to the courts for help to restructure their credit obligations, but some courts are more helpful than others. This is especially true when creditors cannot agree on a particular resolution, let alone when some creditors will not be paid at all. International corporations often have a choice of forum—and substantive insolvency law—based on their legal and physical presence in dozens or even hundreds of countries. The UK and U.S. offer different avenues for using insolvency law to restructure debts without total liquidation, and the American avenue has become more difficult to navigate thanks to …

In Whose Interests Should A Company Be Run? Fiduciary Duties Of Directors During Corporate Failure In India: Looking To The West For Answers, Gautam Sundaresh

Michigan Business & Entrepreneurial Law Review

This Comment looks at the debate as it has played out in the legal jurisprudence of the U.S. and the U.K. The analysis of each considers the three financial stages of a corporation’s existence that are specifically addressed in the debate today, i.e.: (i) solvency; (ii) insolvency; and (iii) the zone of insolvency. After setting out the current position, this Comment specifically addresses the various shortcomings and criticisms of the models adopted by each jurisdiction and offers observations on the status quo and the implementation of these models. On this basis, this Comment goes on to propose a model to …

The Dialogic Aspect Of Soft Law In International Insolvency: Discord, Digression, And Development, John A. E. Pottow

Michigan Journal of International Law

In this study, I describe three important articles in the IRJ model law and discuss their development, drawing in part upon my experience as a delegate to UNCITRAL Working Group V. In doing so, I want to situate these developments within the broader discussions of international law and international relations theory regarding soft law. Doing so will both vindicate and puzzle some of the conventional understanding of how soft law instruments tend to function, although some of the conclusions must necessarily be conjectural at this stage.

A Fresh View On The Hard/Soft Law Divide: Implications For International Insolvency Of Enterprise Groups, Irit Mevorach

Michigan Journal of International Law

It is the orthodox belief that treaties and—within the EU—directly applicable regulations represent hard, binding international law, while other international instruments—including model laws—are forms of soft law. In a previous publication(The Future of Cross-Border Insolvency: Overcoming Biases and Closing Gaps), I discussed how the traditional distinction between hard and soft law is less firm, due particularly to economic and behavioural implications of instrument choice and design. Building on that analysis, this Article focuses on the new rules for the international insolvency of enterprise groups in the Recast EU Insolvency Regulation 2015 (the “EIR”) and in the forthcoming UNCITRAL model law …

The Ammanati Affair: Seven Centuries Old, And Not Feeling The Age, Eugenio Vaccari

Chicago-Kent Law Review

The enactments of the UNCITRAL Model Law on Cross-Border Insolvency and the European Regulations on insolvency proceedings have promoted an incremental approach towards substantive harmonization. This strategy has not remained unquestioned. One of the major criticisms is that such a course of actions overlooks the nature of the issues currently raised in multi-national and cross-disciplinary bankruptcy procedures.

This Article focuses on the Anglo/American bankruptcy tradition. It adopts a doctrinal methodology to question the conclusion that “collectivity” is and should be a procedural, objective, and secondary notion in light of two case studies. It suggests that in the context of cross-border, …

A Canadian Lens On Third Party Litigation Funding In The American Bankruptcy Context, Stephanie Ben-Ishai, Emily Uza

Chicago-Kent Law Review

This Article offers two major recommendations to expand the use of third party litigation funding (“TPLF”) into the U.S. insolvency context. As seen in the Canadian context, courts have accepted the use of litigation funding agreements fitting within certain parameters. If U.S. courts follow suit, friction against the implementation of TPLF can be mitigated. Alternatively, regulation may occur through legislative and regulatory models to govern and set out precisely what types of arrangements are permitted. Involving entities such as the SEC may expedite the acceptance of TPLF, but special attention is necessary not to intermingle notions of fiduciaries into the …

The Avoidance Of Pre-Bankruptcy Transactions: An Economic And Comparative Approach, Aurelio Gurrea-Martínez

Chicago-Kent Law Review

Most insolvency jurisdictions provide several mechanisms to reverse transactions entered into by a debtor prior to the commencement of the bankruptcy procedure. These mechanisms, generally known as claw-back actions or avoidance provisions, may fulfil several economic goals. First, they act as an ex post alignment of incentives between factually insolvent debtors and their creditors, since the latter become the residual claimants of an insolvent firm, but they do not have any control over the debtor’s assets while the company is not yet subject to a bankruptcy procedure. Thus, avoidance powers may prevent or, at least, reverse opportunistic behaviors faced by …

Market Organisations And Institutions In America And England: Valuation In Corporate Bankruptcy, Sarah Paterson

Chicago-Kent Law Review

Courts in England and the United States have traditionally adopted different approaches to the question of valuation in debt restructuring cases. In England, courts have tended to determine whether to approve the allocation of equity in a debt restructuring by reference to the amounts creditors would have received if no debt restructuring had been agreed. The company has typically argued that if no debt restructuring had been agreed either the business or the assets would have been sold. Typically, some evidence of exposure of the business and assets to the market will be submitted to identify the value which would …

Fiduciary Duties Of Directors Of Insolvent Corporations: A Comparative Perspective, Alessandra Zanardo

Chicago-Kent Law Review

Over the last two decades, in many jurisdictions great emphasis has been placed on directors’ fiduciary duties when a corporation is insolvent or in the amorphous “zone of insolvency”; notably, to investigate whether the directors should continue to promote the best interests of the corporation for the benefits of its shareholders, or whether their duties shift to creditors.

The resolution of this ubiquitous issue will help to answer the following questions: Do creditors have standing to pursue claims for breach of fiduciary duties in the insolvency scenario? And, if they do, is it direct or derivative standing?

This Article will …

Bankruptcy Law, Hon. Kevin R. Huennekens, Nathan Kramer

University of Richmond Law Review

This article will cover both consumer and business bankruptcy issues, and is limited primarily to decisions by courts within the Fourth Circuit since mid-2012. Despite these general parameters, because bankruptcy is federal law, there are some cases outside the Fourth Circuit that are included due to their influential and instructive nature. The intention of this update is to provide bankruptcy practitioners in Virginia with concise, yet compre-hensive, case summaries that will prove to be a valuable researchtool.

Time For An Update: A New Framework For Evaluating Chapter 9 Bankruptcies, Michael J. Deitch

Fordham Law Review

Municipal bankruptcies have been making national news since the “Great Recession.” Municipalities like Stockton, Vallejo, and Jefferson County gained notoriety for the record scale of their bankruptcy filings, only to be surpassed by Detroit shortly thereafter as the largest and most populous municipal bankruptcy filing. Historically, municipal bankruptcy occurred infrequently, leaving the nuances of many critical issues, including insolvency, asset utilization, and good faith, unexplored in case law. For example, how should a bankruptcy court analyze Detroit’s cityowned art museum that houses billions of dollars of art when bondholders, pensioners, and other unsecured creditors have unpaid claims? And how should …

A Public Pensions Bailout: Economics And Law, Terrance O'Reilly

University of Michigan Journal of Law Reform

In several states, public pension plans are at risk of insolvency within a decade. These risks are significant, and the solutions currently contemplated are likely to fall short of what is necessary to contain the problem. If public pension plans do become insolvent, it seems likely the federal government will bail them out. This Article proposes that the federal government prepare for the prospect of federal financial support of public pension plans by instituting an optional regulatory regime for public pensions. If a state elects not to participate, its public pension plans would be ineligible for federal financial support. In …

Standing To Sue A Carrier's Killers , Davis J. Howard

Pepperdine Law Review

No abstract provided.

Bankruptcy Law, Hon. Douglas O. Tice Jr., K. Elizabeth Sieg, David W. Gaffey

University of Richmond Law Review

No abstract provided.

The Scorecard So Far: Emerging Issues In Cross-Border Insolvencies Under Chapter 15 Of The U.S. Bankruptcy Code, Megan R. O'Flynn

Northwestern Journal of International Law & Business

Chapter 15 of the U.S. Bankruptcy Code was modeled after the Model Law on Cross-Border Insolvency, drafted by the United Nations Commission on International Trade and Law (UNCITRAL) in 1997. Despite the relatively small number of cases commenced in U.S. Courts under Chapter 15 since its adoption, no other section of the current Bankruptcy Code has broader implications for international business transactions and global foreign business relations than the provisions of Chapter 15. Moreover, since the United States has long been an innovator at the forefront of international insolvency law, interpretation of key provisions of the Chapter and related UNCITRAL …

A Test Case In International Bankruptcy Protocols: The Lehman Brothers Insolvency, Jamie Altman

San Diego International Law Journal

Part II of this Article, explains the competing theories underlying bankruptcy systems: universalism and territorialism. Part III details various statutory solutions to international bankruptcy problems. Next, Part IV analyzes the provisions of the Lehman Protocol in depth. Part V then examines the precedent upon which the Lehman Protocol relies. Part VI assesses potential threats to the Protocol?s success. This leads to Part VII, which contains suggestions for future protocols. Finally, Part VIII concludes.

La Responsabilisation De L'Economie: What The United States Can Learn From The New French Law On Consumer Overindebtedness, Jason J. Kilborn

Michigan Journal of International Law

This Article on the French law continues a study of European consumer debt-relief systems, which the author began previously in an article on the German system. With rapid legal and practical developments in consumer debt-relief law, Europe provides an excellent comparative legal laboratory for observing the potential benefits and pitfalls of consumer bankruptcy reforms. In particular, French and German experiences with long-term payment plans shed useful light on the great debate raging in the United States over similar plans.

Can The Sauvegarde Reform Save French Bankruptcy Law?: A Comparative Look At Chapter 11 And French Bankruptcy Law From An Agency Cost Perspective, Robert Weber

Michigan Journal of International Law

This Note will attempt to explain the intersection of agency costs and bankruptcy law, looking first to general agency problems involved when firms are insolvent and moving next to discussions of how U.S. Chapter 11 and French bankruptcy laws attempt to address these problems. First, I will attempt to articulate the relationship between agency costs and (1) debtor control over the firm during Chapter 11 reorganizations and (2) deviations from the absolute priority rule in Chapter 11. Specifically, I will argue that creditors voluntarily accede to plans proposed by management that impair the same creditors' legal entitlements, and that this …

Resolving Transnational Insolvencies Through Private Ordering, Robert K. Rasmussen

Michigan Law Review

There is no international bankruptcy law. No question, there are international insolvencies. Transnational firms, just like domestic ones, often cannot generate sufficient revenue to satisfy their debt obligations. Their financial distress creates a situation where assets and claimants are scattered across more than one country. But there is no international law that provides a set of rules for resolving the financial distress of these firms. The absence of any significant free-standing international bankruptcy treaty means that a domestic court confronted with the domestic part of a transnational enterprise has to decide which nation's domestic bankruptcy law will apply to which …

A Global Solution To Multinational Default, Jay Lawrence Westbrook

Michigan Law Review

A new world is slouching toward New York and London, Beijing and Bangkok, to be born. If our planet and our values survive the secondary effects of that emergence, we may look forward to a humanity more prosperous and more integrated than at any time in human history. The force that drives us to that future is free-market capitalism constrained in the vessel of democratic institutions. One important element in its progress is the fashioning of an international system for managing the financial crises that are one of the free market's inevitable consequences. In this symposium, we debate which is …

A New Approach To Transnational Insolvencies, Robert K. Rasmussen

Michigan Journal of International Law

Part I of this article sets forth the general problems associated with transnational bankruptcies. Part II then shows that, from an efficiency standpoint, the optimal solution would be to allow firms to select, at the time of incorporation, which set of bankruptcy rules will govern in the event of financial distress. Part III examines the transnational bankruptcy problem under the assumption that each nation will continue to dictate the content of its bankruptcy laws. The accepted wisdom is that under this assumption, the best solution to transnational insolvencies is for all countries to adopt a rule whereby the home jurisdiction …

Caught Between Rocks And Hard Places: The Plight Of Reinsurance Intermediaries Under U.S. And English Law, Stephen W. Schwab, Peter G. Gallanis, David E. Mendelsohn, Bradley V. Ritter

Michigan Journal of International Law

Accordingly, Part I of this article provides a review of the role intermediaries have played in the recent spate of insurance company insolvencies and an overview of intermediary rights and duties. Part II then progresses to a discussion of English intermediary law, analyzing how the general English rules apply to intermediaries when a cedent or reinsurer becomes insolvent. Part III addresses the same issues under U.S. law, tracing the most recent statutory developments from their cause and considering their effect on reinsurance transactions. This article concludes with a discussion of how English and U.S. law interact in reinsurance transactions, pointing …