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Full-Text Articles in Law
Dodd-Frank Orderly Liquidation Authority: Too Big For The Constitution?, Thomas W. Merrill, Margaret L. Merrill
Dodd-Frank Orderly Liquidation Authority: Too Big For The Constitution?, Thomas W. Merrill, Margaret L. Merrill
Faculty Scholarship
Title II of the Dodd–Frank Wall Street Reform and Consumer Protection Act of 2010 establishes a new specialized insolvency regime, known as orderly liquidation, for systemically significant nonbank financial companies. While well intended, Title II unfortunately raises a number of serious constitutional questions. To vest authority in an Article III judge to appoint a receiver for such companies, yet also avoid a financial panic, Dodd–Frank requires that the judicial proceedings be conducted in secret, with no notice to the public or other interested parties on pain of criminal penalties, and that the judge rule on the petition to appoint the …
Extraterritorial Avoidance Actions: Lessons From Madoff, Edward R. Morrison
Extraterritorial Avoidance Actions: Lessons From Madoff, Edward R. Morrison
Faculty Scholarship
The Madoff case continues to provide fertile ground for testing boundaries of the U.S. Bankruptcy Code (Code). In July 2014, Judge Rakoff issued an important decision regarding the extraterritorial scope of the Code’s avoidance rules. The Trustee for the Madoff Estate, Irving Picard, sought to recover cash withdrawn by “feeder funds.” These funds pooled customer assets, invested them in Bernard L. Madoff Investment Securities (Madoff Securities), withdrew proceeds from the investment prior to Madoff’s SIPA filing, and distributed the proceeds to customers before the funds themselves collapsed. The funds are located abroad: one, Fairfield Sentry, is a British Virgin Islands …