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Sales Free And Clear Of An Intellectual Property Licensee's Interests In Bankruptcy -- Looking To In Re Tempnology For Guidance, Summer Chandler

Journal Articles

Uncertainty surrounds many issues that exist at the intersection of bankruptcy law and intellectual property law. Section 363(f) of the Bankruptcy Code permits the debtor to sell assets free of a third party’s interest in such assets, provided one or more preconditions is satisfied. When a debtor rejects a license agreement pertaining to the debtor’s intellectual property, however, § 365(n) of the Bankruptcy Code allows the licensee to choose to retain its rights to use the intellectual property that was the subject of the rejected license agreement. One unsettled question is whether a debtor may sell intellectual property pursuant to …

Bankruptcy Trusts, Transparency And The Future Of Asbestos Compensation, S. Todd Brown

Journal Articles

As we enter the fifth decade of asbestos personal injury litigation, much of the debate over its immediate future centers on the operations of bankruptcy trusts and their relationship to the tort system. Roughly 100 companies have entered bankruptcy as a result of their unsustainable asbestos liabilities, and, from these bankruptcies, approximately 60 trusts have been established or are in the process of being established. Some critics contend that the trust system is plagued by fraud and abuse; allowing plaintiffs' lawyers to obtain compensation from the trusts for fraudulent claims and to evade relevant discovery obligations under applicable state law. …

Constitutional Gaps In Bankruptcy, S. Todd Brown

Journal Articles

Federal bankruptcy law incorporates a broad range of commercial and related matters that are otherwise left to the States under the Constitution, follows an efficiency-centered process model that may implicate due process, and relies upon a judicial structure that appears to be inconsistent with Article III. In spite of the crushing volume of bankruptcy cases and proceedings each year in which the resolution of one or more of these questions may be relevant, the Supreme Court has had few opportunities to tackle them directly. Indeed, after more than two centuries, the Court has provided precious few insights into the limits …

The Chapter 13 Alternative: A Legislative Solution To Undersecured Home Mortgages, Samuel Bufford

Journal Articles

This article discusses minor changes to the U.S. Bankruptcy Code that would make avoiding foreclosure possible for a homeowner who (a) is presently not able to make the mortgage service payments but (b) could make payments for a mortgage that is reduced to the market value of the property and to a fixed market mortgage rate. This article does not address the political issue of what protections Congress might decide to provide mortgage owners and servicers as a part of such legislation.

Anna Nicole Smith Goes Shopping: The New Forum-Shopping Problem In Bankruptcy, G. Marcus Cole, Todd J. Zywicki

Journal Articles

In the United States, relations between debtors and their creditors are governed by two distinct legal regimes. For the overwhelming majority of credit relationships, state law of contract, property, tort, and consumer protection set up the framework within which the debtor-creditor relationship is established, functions, and in the end, is dissolved. In a smaller but significant number of these relationships, a different forum orchestrates the end of these relationships, namely, federal bankruptcy court. These two distinct forums for debtor-creditor relations coexist side by side, with some disputes moving over time from one forum to the other. As with any system …

The Case For The Tax Collector, Marie T. Reilly

Journal Articles

This article considers the question: Is a transfer of property via a noncollusive, properly conducted property tax foreclosure process entitled to respect in bankruptcy against the trustee's fraudulent transfer avoiding power? It answers this question in the affirmative. Part II examines the Court's opinion in BFP v. Resolution Trust Corp. and how courts have applied it in fraudulent transfer challenges to tax foreclosure transfers. Most courts have read BFP as requiring a comparison between the conditions under which the tax foreclosure at issue occurs and mortgage foreclosure. If the tax foreclosure process does not require public sale with competitive bidding, …

Section 524(G) Without Compromise: Voting Rights And The Asbestos Bankruptcy Paradox, S. Todd Brown

Journal Articles

Section 524(g) of the Bankruptcy Code was adopted to protect unknown future asbestos personal injury victims' rights and prospects for financial recovery. To serve these goals and satisfy the demands of due process, Section 524(g) provides two basic forms of virtual representation for future victims - requiring the appointment of an independent legal representative and aligning the interests of future victims with current claimants (75% of whom must approve any plan that invokes Section 524(g)). In recent years, however, the 75% super-majority vote requirement has been transformed into a veto power wielded by a small group of law firms, who …

Non-Pecuniary Interests And The Injudicious Limits Of Appellate Standing In Bankruptcy, S. Todd Brown

Journal Articles

Standing to appeal bankruptcy court orders today is limited to those with a pecuniary interest. This prudential limitation is based on the person aggrieved requirement of Section 39(c) of the Bankruptcy Act of 1898 - a requirement that was not included in the Bankruptcy Code. This article examines the extensive differences between the Act and the Code, the potential justifications for extending the pecuniary interest test in spite of the omission of the person aggrieved requirement, and the potential ramifications for parties and the integrity of the bankruptcy process. This analysis suggests that standing to appeal bankruptcy orders should be …

International Insolvency Case Venue In The European Union: The Parmalat And Daisytek Controversies, Samuel Bufford

Journal Articles

The European Union Insolvency Regulation (the EU Regulation) is a giant step forward in promoting international cooperation among EU countries for cross-border insolvency proceedings. It adopts a modified universalist solution to cross-border proceedings insofar as they are located within the EU. However, experience has shown that it needs improvement to work effectively. A venue battle now rages between courts of several European countries over which country's courts will administer particular cross-border proceedings and how the center of main interest is to be determined for this purpose.

This Article begins with a detailed examination of the two principal cases where conflicts …

Global Venue Controls Are Coming: A Reply To Professor Lopucki, Samuel Bufford

Journal Articles

This Article details my disagreements with Professor Lynn LoPucki's article "Global and out of Control" (79 Am. Bankr. L.J. 79). Part I discusses universalism and territorialism, especially the modified version of universalism that I support. Part II examines the international venue provisions of the Model Law and the EU Regulation. Part III introduces the relevant venue shopping cases. Only two groups of cases are relevant for the purpose of this paper: the French and German subsidiaries of Daisytek and Eurofood (a subsidiary of Parmalat SpA, the Italian conglomerate). None of the other cases that Professor LoPucki discusses was subject to …

Limiting Liability Through Bankruptcy, G. Marcus Cole

Journal Articles

The purpose of this Article is to expose that function of bankruptcy law that distinguished it from English and Colonial insolvency law, and to determine the scope of and need for bankruptcy law to perform that function in contemporary society. I posit that the distinguishing character of bankruptcy law was, and continues to be, its ability to serve as a temporal asset partitioning device. By asset partition, I mean the ability of a structure to sequester the assets of an owner of an enterprise from the reach of the creditors of that enterprise, or the assets of the enterprise from …

Delaware Is Not A State: Are We Witnessing Jurisdictional Competition In Bankruptcy, G. Marcus Cole

Journal Articles

Over the last twelve years, the United States District Court for the District of Delaware has experienced exponential growth in the number of bankruptcy filings for large corporate debtors. This relatively recent rise in Delaware bankruptcy venue cannot, on its face, be explained by Delaware's eighty-five-year preeminence in the race for corporate charters, since the advantages most often postulated for Delaware's dominance in corporate law do not carry over to corporate bankruptcy. The state has limited influence over federal bankruptcy law and virtually no control over the selection of federal bankruptcy judges.

This rise of Delaware bankruptcy venue, or Delawarization …

The Wasted Sacrifice Of Lessors' Lost Profit Claims In Bankruptcy, Marie T. Reilly

Journal Articles

Bankruptcy Code section 502(b)(6) sets the maximum allowable amount of a real property lessor's claim for damages arising for breach of lease in a tenant's bankruptcy case. To the extent a lessor's damages claim under nonbankruptcy law exceeds the maximum amount, it is disallowed. The implicit premise for such disallowance is that real property lessors' damages claims are less worthy of respect in bankruptcy than other claims for damages against the debtor. Real property leases are legally distinct from leases of personal property or other contractual relationships that allocate property rights. But, it does not obviously follow from the distinction …

Introduction To The Articles Presented By Three Rising Stars In Bankruptcy Scholarship, Samuel Bufford

Journal Articles

Bankruptcy law is one of the fundamental legal structures necessary to the functioning of a market economy. In the common law tradition of the United States and England, bankruptcy law dates back to 1542. Bankruptcy law's origins are even more ancient, with roots extending back to at least the Hammaurabi Code and the Law of Moses. In the transition to market economies and Western-style legal systems in Central and Eastern Europe, the development of a viable bankruptcy law is one of the first priorities. This, the United States bankruptcy law that forms the background for this symposium is central to …

The Latent Efficiency Of Fraudulent Transfer Law, Marie T. Reilly

Journal Articles

A creditor holding a claim against a debtor typically holds the right, subject to the debtor's default, to obtain a judgment against the debtor, liquidate the debtor's assets, and apply the proceeds against his claim. If the debtor's assets are insufficient to satisfy the creditor's claim, the creditor is usually, but not always, out of luck. Under limited circumstances, a creditor can reach property the debtor transferred to a third party and apply the value of such property to satisfy his claim. The creditor can undo the transfer and obtain the property or its value from the transferee as though …

Romanian Bankruptcy Law: A Central European Example, Samuel Bufford

Journal Articles

Romania now has one of the best-drafted bankruptcy laws in Central and Eastern Europe. The new Romanian bankruptcy law went into effect on August 26, 1995 and replaced the previous bankruptcy provisions in §695-987 of the Romanian Commercial Code, which was translated from the Italian Commercial Code of 1884 and enacted in 1887. While the commercial code fell into disuse during the Communist era, it was never repealed. After the Romanian revolution and the demise of Nicolae Ceauşescu at the end of 1989, the commercial code as well as the civil code remained good law and needed only to be …

Chapter 11 Case Management And Delay Reduction: An Empirical Study, Samuel Bufford

Journal Articles

Chapter 11 bankruptcy cases will drag on interminably if judges let them. The recent nine-month O.J. Simpson trial was short compared to the careers of some chapter 11 bankruptcy cases. The typical duration of chapter 11 cases can be reduced remarkably, however, through moderate judicial case management.

The data in this study show that relatively modest judicial case management can squeeze a substantial amount of delay out of chapter 11 cases within the context of the present bankruptcy law. The case management program in this study, applied to 81.2% of the chapter 11 case load, shortened by 24.1% the time …

Bankruptcy Law In European Countries Emerging From Communism: The Special Legal And Economic Challenges, Samuel Bufford

Journal Articles

Bankruptcy law is developing rapidly in the countries of Central and Eastern Europe (CEE) that have recently escaped the domination of the Union of Soviet Socialist Republics (USSR). The communist governments fell in those countries that were separate from the USSR in 1989, and those countries that were a part of the USSR gained their independence and acquired new non-communist governments in 1989 (the Baltic states) and 1991 (Ukraine, Belarus, Moldova, and Russia). While many other areas of law that are basic to the development of a market economy need substantial development or revision, bankruptcy law is leading the way, …

What Is Right About Bankruptcy Law And Wrong About Its Critics, Samuel Bufford

Journal Articles

My comments in this paper focus on the papers in thus Symposium by Professors Barry Adler, James Bowers, and Philippe Aghion, Oliver Hart, and John Moore. I argue that the central points of these papers are gravely mistaken because they completely misunderstand the character of the bankruptcy caseload and procedures, they ignore some important purposes of bankruptcy reorganization, and they misstate the success rate for reorganizations. I have chosen these papers for comment for two reasons: they recommend radical changes in bankruptcy law, and they are based on the thinnest knowledge of bankruptcy practice. Incidentally, they also all take an …

The Manville Bankruptcy: Treating Mass Tort Claims In Chapter 11 Proceedings, Robert Jones

Journal Articles

The reorganization petition filed by the Manville Corporation, the nation’s largest asbestos manufacturer in 1982 is an attempt by a healthy and solvent corporation to declare bankruptcy. It differs greatly from a traditional reorganization case, which involves a debtor that knows who its creditors are and how much it owes them. Manville does not know who the majority of its creditors are or the amount of its potential tort liability. It is instead using the 1978 Bankruptcy Reform Act's Chapter 11 reorganization provisions to seek shelter from a huge but speculative tort liability. In doing so Manville presents a major …