Law Commons^™

Lender Discrimination, Black Churches And Bankruptcy, Pamela Foohey

Articles by Maurer Faculty

Based on my original empirical research, in this Article, I expose a disparity between the demographics of the roughly 650 religious congregations that have filed for chapter 11 bankruptcy during part of the last decade and congregations nationwide. Churches with predominately black membership — Black Churches — appeared in chapter 11 more than three times as often as they appear among churches across the country. A conservative estimate of the percentage of Black Churches among religious congregation chapter 11 debtors is 60%. The likely percentage is upward of 75%. Black Churches account for 21% of congregations nationwide.

Why are Black …

When Faith Falls Short: Bankruptcy Decisions Of Churches, Pamela Foohey

Articles by Maurer Faculty

What does a church do when it is about to go bust? Religious organizations, like any business, can experience financial distress. Leaders could try to solve their churches’ financial problems on their own. Perhaps leaders do not view the problems as addressable with law. Or perhaps they do not think, as a moral or spiritual matter, that they should resort to the legal system, such as bankruptcy, to deal with their churches’ inability to pay its debts. Yet about ninety religious organizations seek to reorganize under the Bankruptcy Code every year. This Article relies on interviews with forty-five of these …

Secured Credit In Religious Institutions' Reorganizations, Pamela Foohey

Articles by Maurer Faculty

Scholars increasingly assume that most businesses enter Chapter 11 with a high percentage of secured debt, which leads to a high percentage of cases ending in the sale of the debtor’s assets under section 363 of the Bankruptcy Code rather than with confirmation of a reorganization plan. However, evidence and discussions about “the end of bankruptcy” center on secured creditors’ role in the reorganizations of very large corporations. The few analyses of cross-sections of Chapter 11 proceedings suggest that secured creditor control is not nearly as omnipresent as asserted and that 363 sales are not as dominant as assumed.

This …

When Churches Reorganize, Pamela Foohey

Articles by Maurer Faculty

The article complements and expands the author’s prior article, Bankrupting the Faith. This article primarily relies on interviews with attorneys who represented religious organizations in chapter 11 bankruptcy to assess whether reorganization has the potential to offer an effective solution to religious organizations’ financial problems. In doing so, it makes three contributions. First, it tracks the post-bankruptcy outcomes of a portion of the debtors to find that approximately 65% remained operating post-bankruptcy; these outcomes contradict previous studies of small business bankruptcy and are important to current debates about reforming small business bankruptcy. Given this—and in keeping with the ABLJ’s …