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Full-Text Articles in Law
Will Exploding Guaranties Bomb?, Marshall E. Tracht
Will Exploding Guaranties Bomb?, Marshall E. Tracht
Articles & Chapters
Springing and exploding guaranties - insider guaranties that will become due ifand when a borrower files for bankruptcy - have become popular as "bankruptcy-proofing" devices, yet there is little case law or literature on their enforceability. This article reviews the limited existing law on these bankruptcy-contingent guaranties and examines some of the arguments against their enforceabiltiy that can be expected to be made in the future.
The New Textualism And The Rule Of Law Subtext In The Supreme Court's Bankruptcy Jurisprudence, Alan Schwartz
The New Textualism And The Rule Of Law Subtext In The Supreme Court's Bankruptcy Jurisprudence, Alan Schwartz
NYLS Law Review
The Supreme Court is thought to use a method of statutory interpretation called "the new textualism" when construing Federal Statutes, including the Bankruptcy Code. The new textualism, in brief, ties interpreters more closely to the text than more traditional interpretative methods. This Essay inquires into the justifications for the new textualism, but its primary goal is to argue that the Court prefers an important justification of this interpretative method to the method itself. The justification holds that interpretation should advance the rule of law virtues of certainty and predictability. A court that is committed to the new textualism would construe …
Insider Guaranties In Bankruptcy: A Framework For Analysis, Marshall E. Tracht
Insider Guaranties In Bankruptcy: A Framework For Analysis, Marshall E. Tracht
Articles & Chapters
This article presents an economic analysis of insider guaranties in small business finance and bankruptcy, explaining their role in the panoply of legal and contractual devices used to control financial agency costs. It then uses this model to examine two areas of concern in the bankruptcy treatment of insider guaranties (the Deprizio preference problem and the enforceability of springing and exploding guaranties) and to explore some of the wider implications of insider guaranties for small business bankruptcy. Building on the fact that insider guaranties are typically used less to increase the assets available for repayment of the debt than to …