Law Commons^™

What Can Be Done About Stock Market Volatility, Tamar Frankel

Faculty Scholarship

Volatility is as old as the financial markets. The bull market of 1986 and the crash that followed in 1987 were but the latest of periodic market gyrations that started with the South Sea Bubble and the Lombard Street run on commercial paper and have continued ever since.' Volatility in the financial markets would not be very important if market activity simply mirrored economic activity. Volatility would be much less important if the markets moved independently of the economy. But if we believe, as I do, that the markets and the economy are interdependent, and that their volatility is generally …

Sharing The Risks Of Bankruptcy: Timbers, Ahlers, And Beyond, Robert E. Scott

Faculty Scholarship

Bankruptcy policy appears to be in disarray. Recent decisions by the United States Supreme Court have only served to reinforce the uncertainties that mar the bankruptcy process. In United Savings Association of Texas v. Timbers of Inwood Forest Associates, Ltd., the Court held that an undersecured creditor was not entitled to interest on its collateral as compensation for the opportunity costs of delay caused by the bankruptcy process. Timbers thus supports the argument that secured creditors should be forced to share the burdens of bankruptcy with other claimants. Conversely, in Norwest Bank Worthington v. Ahlers, the Court held …

On The Nature Of Bankruptcy: An Essay Of Bankruptcy Sharing And The Creditor's Bargain, Thomas H. Jackson, Robert E. Scott

Faculty Scholarship

Finance theorists have long recognized that bankruptcy is a key component in any general theory of the capital structure of business entities. Legal theorists have been similarly sensitive to the substantial allocational and distributional effects of the bankruptcy law. Nevertheless, until recently, underlying justifications for the bankruptcy process have not been widely studied. Bankruptcy scholars have been content to recite, without critical analysis, the two normative objectives of bankruptcy: rehabilitation of overburdened debtors and equality of treatment for creditors and other claimants.

The developing academic interest in legal theory has spurred a corresponding interest in expanding the theoretical foundations of …