Law Commons^™

The Tax Benefit Rule -- A Judicially Broadened Tool For Transactional Tax Equity, Jerry N. Smith

Vanderbilt Law Review

In light of the recent Supreme Court holding in United States v. Bliss Dairy, Inc.10 that the tax benefit rule requires income recognition by a corporation when it distributes previously expensed assets in complete liquidation, this Note assesses the dubious continued vitality of the tax benefit rule's single taxpayer construct-that is, the requirement that the same individual or entity serve as both the deducting and the recovering taxpayer. As the following analysis indicates, expansion of the tax benefit rule into a multiple taxpayer construct potentially requires some form of "recapture" in numerous factual settings previously considered non-taxable under existing nonrecognition …

The Continuing Puzzle Of Secured Debt, Alan Schwartz

Vanderbilt Law Review

In 1981, I wrote an article showing that no good answer had been given to the question why corporations issue some debt on a secured basis and other debt on an unsecured basis.' This showing had normative implications because claims that the institution of personal property security is efficient or otherwise desirable must be impeached if the actual purposes that security serves are unknown. Consequently, the law's favorable treatment of secured debt-for example, giving it first place in bankruptcy distributions--is without plausible support. My article did not advocate repealing the privileges attached to secured debt, however, because then--current knowledge also …

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 …