Law Commons^™

Crowdsourcing (Bankruptcy) Fee Control, Matthew Bruckner

Matthew Adam Bruckner

In this article, I explore how crowdsourcing can help reduce the cost of professional representation in corporate bankruptcy cases. The cost of professional representation in bankruptcy cases is currently a hot topic, with oral argument haven taken place before the U.S. Supreme Court in Baker Botts L.L.P. v. Asarco, L.L.C. in February 2015, which case addressed various issues raised in my article. In brief, the fees of lawyers, investment bankers, and other bankruptcy professionals has been spiraling out of control because chapter 11’s existing fee control system is broken. That system can neither identify nor control professional overcharging, which empirical …

Examining Success, Jonathan C. Lipson

Jonathan C. Lipson

Chapter 11 of the Bankruptcy Code presumes that managers will remain in possession and control of a corporate debtor. This presents an obvious agency problem: these same managers may have gotten the company into trouble in the first place. The Bankruptcy Code thus includes checks and balances in the reorganization process, one of which is supposed to be an “examiner,” a private individual appointed to investigate and report on the debtor’s collapse.

We study their use in practice. Extending prior research, we find that examiners are exceedingly rare, despite the fact that they should be “mandatory” in large cases ($5 …

Flexible Finality In Bankruptcy: The Right To Appeal A Denial Of Plan Confirmation, Joseph L. Nepowada

Joseph L Nepowada

This Article examines the current state of the law interpreting what “finality” means in context of a bankruptcy proceeding and what effect that interpretation has on the appealability of certain orders, such as the denial of plan confirmation under a Chapter 13 bankruptcy proceeding. The article highlights nine courts of appeals and their decisions concerning the appealability of a denial of a plan confirmation and it is apparent that the courts are split with three courts of appeal allowing a debtor to appeal a denial of plan confirmation as a matter of right, while six courts of appeal will deny …

Chapter 11 Triage: Diagnosing A Debtor's Prospects For Success, Anne Lawton

Anne Lawton

In 2005, Congress enacted a number of provisions aimed at improving success rates for Chapter 11 small business debtors. The available empirical data, albeit limited in scope, showed startlingly low rates of plan confirmation. Conventional wisdom attributed the plan confirmation problem to the high failure rate of the Chapter 11 small business debtor. This Article presents the results of a large empirical study of Chapter 11 cases filed in 2004, the year before the small business amendments. The study examines the following questions. First, are confirmation rates in Chapter 11 low, and how do small debtors fare in terms of …

Chapter 11 Triage: Diagnosing A Debtor's Prospects For Success, Anne Lawton

Anne Lawton

Chapter 11 Triage: Diagnosing A Debtor's Prospects for Success by Anne Lawton In 2005, Congress enacted a number of provisions aimed at improving success rates for Chapter 11 small business debtors. The available empirical data, albeit limited in scope, showed startlingly low rates of plan confirmation. Conventional wisdom attributed the plan confirmation problem to the high failure rate of the Chapter 11 small business debtor. This Article presents the results of a large empirical study of Chapter 11 cases filed in 2004, the year before the small business amendments. The study examines the following questions. First, are confirmation rates in …

Chapter 11 Triage: Diagnosing A Debtor's Prospects For Success, Anne Lawton

Anne Lawton

In 2005, Congress enacted a number of provisions aimed at improving success rates for Chapter 11 small business debtors. The available empirical data, albeit limited in scope, showed startlingly low rates of plan confirmation. Conventional wisdom attributed the plan confirmation problem to the high failure rate of the Chapter 11 small business debtor. This Article presents the results of a large empirical study of Chapter 11 cases filed in 2004, the year before the small business amendments. The study examines the following questions. First, are confirmation rates in Chapter 11 low, and how do small debtors fare in terms of …

Investing In Distressed Italian Companies Under The Reformed Italian Bankruptcy Law - A Comparison With The Us Bankruptcy Code, Pierantonio Musso

Pierantonio Musso

This article presents a scheme to profitably invest in distressed Italian companies by taking advantage of the Italian Bankruptcy Law in comparison with the US Bankruptcy Code. The risks connected to the insolvency proceeding are analyzed under their economic effects and foreseen in their general appearance. Specific remedies to avoid or mitigate the potential risks are provided. Singular advantages, available only in the proposed investment scheme under the Italian Law, are described. As a result the investment produces a less risky and more profitable outcome than an investment in a non-distressed and non-Italian target company.

Delaware’S Relevance In Chapter 22: Who Is “Courting Failure” Now?, Ruth S. Lee

Ruth S Lee

This study presents surprising new statistical evidence that contributes to the current “over-heated” academic debate about the Delaware courts’ role in Chapter 11 failure. In 2001, Professor LoPucki published an influential article suggesting that when large corporations file for bankruptcy under Chapter 11, they fail at a dramatically higher rate in Delaware courts than in other jurisdictions. He attributed this to corruption. His article enraged many academics and practitioners, and ignited many articles in the past two decades. This study presents startling evidence that while Chapter 11s filed in Delaware courts did have much higher failure rates from 1991-1996, after …