Law Commons^™

Paying Paul And Robbing No One: An Eminent Domain Solution For Underwater Mortgage Debt, Robert C. Hockett

Robert C. Hockett

In the view of many analysts, the best way to assist “underwater” homeowners — those who owe more on their mortgages than their houses are worth — is to reduce the principal on their home loans. Yet in the case of privately securitized mortgages, such write-downs are almost impossible to carry out, since loan modifications on the scale necessitated by the housing market crash would require collective action by a multitude of geographically dispersed security holders. The solution, this study suggests, is for state and municipal governments to use their eminent domain powers to buy up and restructure underwater mortgages, …

Statutory Liens And The Bankruptcy Act: U.C.C. § 2-702 And Section 67(C), Robert Green

Robert A. Green

Ending The Nonsense: The In Pari Delicto Doctrine Has Nothing To Do With What Is § 541 Property Of The Bankruptcy Estate, Jeffrey Davis

Jeffrey Davis

The recent wave of disregard for corporate fiduciary responsibilities has provided numerous opportunities for courts to consider whether the corporations bankrupted by the unlawful acts of their principals should be prohibited by the in pari delicto doctrine from pursuing liability claims against third parties who contributed to the harm. In an array of recent cases, courts have reluctantly and apologetically, yet uniformly, permitted third parties who contributed to the demise of these corporations to escape liability because they felt § 541 of the Bankruptcy Code (the "Code") left them no other choice. Section 541 provides that the filing of a …

Florida's Beefed-Up Assignment For The Benefit Of Creditors As An Alternative To Bankruptcy, Jeffrey Davis

Jeffrey Davis

Two new corporate clients have been referred to you. The owners of both corporations have consulted lawyers about their struggling businesses and now seek second opinions. The first was advised by its attorney to file a Chapter 7 bankruptcy petition, the second was advised to file a Chapter 11 petition. You think both should consider an assignment for the benefit of creditors. Why? Stated simply, an assignment for the benefit of creditors, or an ABC, is normally much simpler and almost always less expensive than a comparable bankruptcy proceeding.' The substantial savings in expense results in larger payouts to both …

Fixing Florida's Execution Lien Law Part Two: Florida's New Judgment Lien On Personal Property, Jeffrey Davis

Jeffrey Davis

Under both the prior and current laws, a creditor seeking to satisfy a judgment out of property of the judgment debtor obtains a writ of execution from the clerk of the court that issued the judgment and then delivers the writ to a sheriff in one of Florida's sixty-seven counties. The writ commands the sheriff to levy on property of the debtor until the amount stated in the writ is satisfied. Under the prior law, delivery of the writ to the sheriff not only initiated the execution process, but under the seminal case of Love v. Williams, it also created …

Water Bankruptcy, Christine A. Klein

Christine A. Klein

Many western states are on the verge of bankruptcy, with debts exceeding assets. And yet, they continue to take on additional debt through contracts and other commitments. Although this distress sounds like an outgrowth of the 2008 recession, this crisis involves water, not money. In particular, the problem concerns the western prior appropriation system of water law, which allocates the right to use water under the priority principle of “first in time, first in right.” In many states, the system is so “over-allocated” that it promises to deliver annually much more water than nature provides. The crisis will deepen as …

The Intersection Of Tax And Bankruptcy: The Mccoy Rule, John Ferguson

John Ferguson

No abstract provided.

Chapter 9 Plan Confirmation Standards And The Role Of State Choices, Juliet Moringiello

Juliet M Moringiello

Because so few municipalities have ever filed for bankruptcy, none of the Chapter 9 confirmation standards have benefitted from extensive judicial scrutiny. The standards are particularly undeveloped as applied to cities and counties, whose debt structure and service obligations are more complicated and diverse than those of the special purpose districts whose cases generate the vast majority of Chapter 9 judicial opinions. The lack of clarity is not only bad for distressed cities and their creditors, it is undesirable from a public policy standpoint. States can choose whether to permit their municipalities to file for bankruptcy, and clear plan confirmation …

The Myths Of Going Concern Valuations, Jack F. Williams

Jack F. Williams

No abstract provided.

National Bankruptcy Review Commission Tax Recommendations: Notice, Jurisdiction, And Corporate Debtors, Jack F. Williams

Jack F. Williams

Pursuant to congressional mandate, the National Bankruptcy Review Commission (NBRC) reported its recommendations for modification of the Bankruptcy Reform Act of 1978, as amended (the Bankruptcy Code), to the President, Congress, and Chief Justice of the Supreme Court on October 20, 1997. This Article, the second and final installment analyzing the tax recommendations of the NBRC, focuses on the proposed revisions relating to, among other things, taxation of corporate and partnership debtor estates. In particular, this Article discusses the requirement of reasonable notice to the government, bankruptcy court jurisdiction over tax controversies, bankruptcy administration affecting tax matters, chapter 11 plan …

Daubert And Financial Expert Testimony In Bankruptcy Courts, Jack F. Williams

Jack F. Williams

No abstract provided.

Sale Of Property Of The Estate Free And Clear Of Restrictions And Covenants In Bankruptcy, Basil Mattingly

Basil H. Mattingly

No abstract provided.

Re-Establishment Of Bankruptcy Review Of Oppressive Foreclosure Sales: The Interaction Of Avoidance Powers As Applied To Creditors Bid-Ins, Basil Mattingly

Basil H. Mattingly

No abstract provided.

The Bankruptcy Reform Process: Maximizing Judicial Control In Wage Earners' Plans, Marjorie L. Girth

Marjorie L. Girth

No abstract provided.

The Role Of Empirical Data In Developing Bankruptcy Legislation For Individuals, Marjorie L. Girth

Marjorie L. Girth

Symposium: As We Forgive Our Debtors

Veiled Egos: Alter Ego, Veil-Piercing, And Sections 362(A) And 727(A), Amir Shachmurove

Amir Shachmurove

No abstract provided.

The Orderly Liquidation Authority: Fanatical Or Familiar? Idealistic Or Unrealistic?, Stephanie P. Massman

Stephanie P Massman

The systemic financial crisis of 2008 spurred the failure of numerous financial and non-financial entities. Regulators addressed each of these failures on an ad hoc ex-post basis, granting multiple bailouts in various forms. The refusal to extend these bailouts to one firm, Lehman Brothers, however, caused further panic and contagion throughout the already unstable market as one of the largest financial institutions of the U.S. underwent an extremely lengthy and value-destructive Chapter 11 bankruptcy. Criticism surrounding not only the bailouts, but also the decision to allow Lehman to fail under the Bankruptcy Code, led to the inclusion of the Orderly …

Against Regulatory Displacement: An Institutional Analysis Of Financial Crises, Jonathan C. Lipson

Jonathan C. Lipson

This paper uses “institutional analysis”—the study of the relative capacities of markets, courts, and regulators—to make three claims about financial crises.

First, financial crises are increasingly a problem of “regulatory displacement.” Through the ad hoc rescues of 2008 and the Dodd-Frank reforms of 2010, regulators displace market and judicial processes that ordinarily prevent financial distress from becoming financial crises. Because regulators are vulnerable to capture by large financial services firms, however, they cannot address the pathologies that create crises: market concentration and complexity. Indeed, regulators may inadvertently aggravate these conditions through resolution tactics that consolidate firms, and the volume and …

Reward The Stalking Horse Or Preserve The Estate: Determining The Appropriate Standard Of Review For Awarding Break-Up Fees In § 363 Sales, Zachary Frimet

Zachary Frimet

Following the surge of bankruptcies in the wake of the Great Recession, a growing and somewhat controversial trend has emerged whereby companies seeking to purchase a debtor’s assets in bankruptcy frequently make use of Section 363 of the United States Bankruptcy Code (“§ 363”). In general, § 363 sales are accomplished via public auction. This aspect of § 363 exposes initial bidders, known in bankruptcy as “stalking horses bidders”, to the risk that they will commit time and resources in pursuit of the acquisition and yet fail to succeed as the prevailing bidder. To hedge against this risk, stalking horse …

Litigating For The Future Of Public Pensions, Paul Secunda

Paul M. Secunda

Public pensions are horribly unfunded, millions of public employees are being forced to make greater contributions to their pensions, retirees are being forced to take benefit cuts, retirement ages and service requirements are being increased, and the list goes on and on. These alarming developments involve all level of American government, from the recent move to require new federal employees to contribute more to their pensions, to the significant underfunding of state and local public pension funds across the country, to the sad spectacle of the Detroit municipal bankruptcy where the plight of public pensions plays a leading role in …

The Saga Of Income From Income-Producing Collateral Treatment In Bankruptcy For Undersecured Creditors, Ian D. Ghrist

Ian D. Ghrist

Abstract

Who gets the income from income-producing collateral during bankruptcy—the debtor or the undersecured creditor? Throughout the history of bankruptcy law in America, this question has not had a bright-line answer. It is one of those indelible questions whose answer lies even to this day within the equitable power of courts of equity. In 2014, the First Circuit looked at this question and adopted the Fifth Circuit’s “flexible approach.”

With the flexible approach growing in popularity, the lower courts’ tendency to adopt rigid valuation methodologies should fade. Instead of taking positions on either the addition method or the subtraction method, …

Unquantifiable Wrongs, Incomparable Remedies: Post-Petition Enforcement Of Noncompetition Agreements, Amir Shachmurove

Amir Shachmurove

No abstract provided.

Seeking Solutions To Financial History Discrimination, Lea Krivinskas Shepard

Lea Krivinskas Shepard

Employers’ use of credit reports to evaluate prospective job applicants has generated considerable scrutiny in the popular press and academic literature, but few proposals for reform. This Article explores three possible ways of reducing the risk of financial history discrimination in the employment setting.

First, imposing inquiry limits on employers’ use of credit reports, a policy recently adopted or under consideration in the majority of states, is unlikely to be effective, since states’ inquiry limits are currently narrowly drafted and therefore advance few anti-discriminatory objectives. In addition, inquiry limits cannot prevent self-interested individuals from voluntarily revealing their credit histories and …

Oral History: The Honorable J. Rich Leonard, Retired, J. Rich Leonard

J. Rich Leonard

This is part one of a video featuring Dean Leonard giving an oral history of his tenure as United States Bankruptcy Judge for the Eastern District of North Carolina.

Oral History: The Honorable J. Rich Leonard, Retired (Part 2), J. Rich Leonard

J. Rich Leonard

Part two of Dean Leonard's oral history video.

How Ideas Turn Into Law: Abi Review Commission; Bankruptcy Code At 30; Sausage-Making 101, Ingrid Hillinger

Ingrid Michelsen Hillinger

No abstract provided.

The Value Of Soft Variables In Corporate Reorganizations, Michelle M. Harner

Michelle M. Harner

When a company is worth more as a going concern than on a liquidation basis, what creates that additional value? Is it the people, management decisions, the simple synergies of the operating business, or some combination of these types of soft variables? And perhaps more importantly, who owns or has an interest in these soft variables? This article explores these questions under existing legal doctrine and practice norms. Specifically, it discusses the characterization of soft variables under applicable law and in financing documents, and it surveys related judicial decisions. It also considers the overarching public policy and Constitutional implications of …

Bankruptcy Rule 7004(H) After Espinosa: A Timely Distinction Between Constitutional And Statutory Service, Amir Shachmurove

Amir Shachmurove

In a contested matter or adversary proceeding, Federal Rule of Bankruptcy Procedure 7004(h) sets forth the requisites for service on an “insured depository institution.” Subject to three exceptions, a motion or complaint must be served by certified mail on an officer of these statutorily defined institutions. In a Chapter 13 case, a debtor may attempt to strip-off a wholly unsecured junior mortgage via a motion under § 506(a) pursuant to Rule 3012, a plan provision in accordance with § 1322(b)(2), an adversary proceeding, or some combination. This article focuses on how a debtor’s failure to satisfy Rule 7004(h) affects the …

Peticion De Quiebra Directa Por El Acreedor, Carlos Molina Sandoval

Carlos Molina Sandoval

El pedido de quiebra por el acreedor es una vía sumaria, rápida, en la cual el juez, sin que medie una amplia etapa cognitiva, determina la acreditación de ciertos supuestos y procede a la declaración de la quiebra -y a la posterior orden de subasta de los bienes que integran la masa falencial-. Pero esta sumariedad procesal no tiene entidad suficiente para sustentar la naturaleza ejecutiva del juicio de quiebra.

Unstayed Non-Default State Judgments And The Bona Fide Dispute Language, William Burton

Bocconi Legal Papers

This Note begins by discussing involuntary bankruptcy generally, the 1984 amendment made to the code affecting this issue, the relative legislative history, and the development of a definition for bona fide dispute. Second, both approaches for dealing with unstayed non-default state judgments as they relate to the requirements of involuntary bankruptcy will be examined. Third, this Note investigates the persuasiveness and negativities behind both approaches. Finally, in an attempt to resolve the ambiguity and solidify Delaware and Pennsylvania courts and the Circuits courts themselves, a suggestion will be made that the Third Circuit, and eventually the Supreme Court, adopt the …