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Columbia Law School

Bankruptcy Law

Bankruptcy

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Bankruptcy Reform And The "Sweat Box" Of Credit Card Debt, Ronald J. Mann Jan 2006

Bankruptcy Reform And The "Sweat Box" Of Credit Card Debt, Ronald J. Mann

Faculty Scholarship

Those that backed the 2005 bankruptcy reform law argued that it would protect creditors from consumer abuse and lack of financial responsibility. The substantial increase in the number of bankruptcies over the last decade combined with the perception of system-wide abuse apparently convinced legislators from both political parties that the backers had a point. Thus, Congress enacted amendments to the Bankruptcy Code that – if effective – would fundamentally change the core policies underlying the consumer bankruptcy system in this country. The rhetoric surrounding the reform debates pressed the idea that if borrowers had to repay more of their debts, creditors would ...


The Supreme Court, The Solicitor General, And Bankruptcy: Bfp V. Resolution Trust Corporation, Ronald J. Mann Jan 2006

The Supreme Court, The Solicitor General, And Bankruptcy: Bfp V. Resolution Trust Corporation, Ronald J. Mann

Faculty Scholarship

This chapter tells the story behind BFP v. Resolution Trust Corporation. I see BFP as a case that pitted relatively plain statutory language supporting the debtor-in-possession against policy interests supporting a secured creditor. I argue that an important explanation for the Supreme Court's decision to favor policy over the language of the statute was its perception of a need to protect the availability of non-bankruptcy remedies for secured creditors. Accordingly, I situate my discussion of BFP in the context of the role that the federal government has played in the Supreme Court's cases interpreting the Bankruptcy Code. In ...


How Law Affects Lending, Rainer F.H. Haselmann, Katharina Pistor, Vikrant Vig Jan 2005

How Law Affects Lending, Rainer F.H. Haselmann, Katharina Pistor, Vikrant Vig

Faculty Scholarship

The paper explores how legal change affects lending behavior of banks in twelve transition economies of Central and Eastern Europe. In contrast to previous studies, we use bank level rather than aggregate data, which allows us to control for country level heterogeneity and analyze the effect of legal change on different types of lenders. Using a differences-in-differences methodology to analyze the within country variation of changes in creditor rights protection, we find that the credit supplied by banks increases subsequent to legal change. Further, we show that collateral law matters more for credit market development than bankruptcy law. We also ...


An Empirical Investigation Of Liquidation Choices Of Failed High-Tech Firms, Ronald J. Mann Jan 2005

An Empirical Investigation Of Liquidation Choices Of Failed High-Tech Firms, Ronald J. Mann

Faculty Scholarship

This paper compares a dataset of failed venture-backed firms to information about the firm's liquidation choices. The first finding is that firms in California are much less likely to use the bankruptcy process than firms in other states, largely because of their ability to use a cheaper and less formal assignment for the benefit of creditors procedure. The paper explores a number of reasons why that procedure succeeds in California more than it does elsewhere, including differences in statutory support for the procedure, the sophistication of market participants in California, the close-knit venture communities in California, and unusual rules ...


An Empirical Investigation Of Liquidation Choices Of Failed High Tech Firms, Ronald J. Mann Jan 2004

An Empirical Investigation Of Liquidation Choices Of Failed High Tech Firms, Ronald J. Mann

Faculty Scholarship

Perhaps it is merely a reflection of my interests, but to my mind, empirical research requires a certain risk-preferent boldness. I like projects that explore how and why particular businesses make important decisions. After I identify a topic, I typically try to gather as much qualitative and quantitative information about it as I can, with the expectation that when I have learned a great deal about the topic something interesting will emerge that relates in some important way to an ongoing academic debate. Those projects usually do not begin with a specific hypothesis to prove or disprove-often either answer will ...


Derivatives And The Bankruptcy Code: Why The Special Treatment?, Franklin R. Edwards, Edward R. Morrison Jan 2004

Derivatives And The Bankruptcy Code: Why The Special Treatment?, Franklin R. Edwards, Edward R. Morrison

Faculty Scholarship

The collapse of Long Term Capital Management (LTCM) in Fall 1998 and the Federal Reserve Bank's subsequent efforts to orchestrate a bailout raise important questions about the structure of the Bankruptcy Code. The Code contains numerous provisions affording special treatment to financial derivatives contracts, the most important of which exempts these contracts from the "automatic stay" and permits counterparties to terminate derivatives contracts with a debtor in bankruptcy and seize underlying collateral. No other counterparty or creditor of the debtor has such freedom; to the contrary, the automatic stay prohibits them from undertaking any act that threatens the debtor ...


The Rise Of State Bankruptcy-Directed Legislation, Ronald J. Mann Jan 2003

The Rise Of State Bankruptcy-Directed Legislation, Ronald J. Mann

Faculty Scholarship

This is a paper for a conference at Cardozo Law School on the relation between securitization and secured credit. Concerns about securitization have been focused by decisions of various States to take the lead in attempting to decide how those issues will be resolved in bankruptcy proceedings. In this paper I step back from that debate to ask a more fundamental question: who is to decide the appropriate policy response to those issues? On the one hand, Congress could decide those questions in the exercise of its exclusive constitutional power to enact bankruptcy laws. Or, if it chose to do ...