Law Commons^™

Path To Destruction: Cook County's Property Tax System Is A Cause For Concern As It Mimics The Defunct Taxing Procedures That Led To The Detroit Foreclosure Crisis, Robert Romano

Chicago-Kent Law Review

For decades, Cook County, Illinois, has had one of the highest property tax rates in the country, and as a result the County has begun to experience unprecedented foreclosure rates which has contributed, in part, to the State’s significant population decline. Residents are forced to endure a property tax system that disproportionately burdens low-income homeowners, while providing tax breaks to higher-income individuals and commercial owners. The primary causes and characteristics of Cook County’s defunct property tax system are strikingly similar to those that sent the City of Detroit spiraling into bankruptcy in 2013.

This note provides a comparative analysis of …

Layering, Conversion, And Drifting: A Comparative Analysis Of Path Dependent Change In Consumer Insolvency Systems, Megan Mcdermott

Chicago-Kent Law Review

The past twenty-five years have been marked by major developments in consumer insolvency systems around the world. The threshold challenge for comparative scholars is to keep up with the changes occurring in individual countries, as a necessary—but preliminary—step toward broader comparisons of the historical, social, and institutional forces in consumer bankruptcy. In order for deeper work to take place, though, the field needs consensus on what factors are most useful to analyze. Moreover, the dynamic environment of consumer insolvency requires a framework for analysis that is flexible and adaptable enough to provide insights notwithstanding the rapid changes in the field. …

The Ammanati Affair: Seven Centuries Old, And Not Feeling The Age, Eugenio Vaccari

Chicago-Kent Law Review

The enactments of the UNCITRAL Model Law on Cross-Border Insolvency and the European Regulations on insolvency proceedings have promoted an incremental approach towards substantive harmonization. This strategy has not remained unquestioned. One of the major criticisms is that such a course of actions overlooks the nature of the issues currently raised in multi-national and cross-disciplinary bankruptcy procedures.

This Article focuses on the Anglo/American bankruptcy tradition. It adopts a doctrinal methodology to question the conclusion that “collectivity” is and should be a procedural, objective, and secondary notion in light of two case studies. It suggests that in the context of cross-border, …

A Canadian Lens On Third Party Litigation Funding In The American Bankruptcy Context, Stephanie Ben-Ishai, Emily Uza

Chicago-Kent Law Review

This Article offers two major recommendations to expand the use of third party litigation funding (“TPLF”) into the U.S. insolvency context. As seen in the Canadian context, courts have accepted the use of litigation funding agreements fitting within certain parameters. If U.S. courts follow suit, friction against the implementation of TPLF can be mitigated. Alternatively, regulation may occur through legislative and regulatory models to govern and set out precisely what types of arrangements are permitted. Involving entities such as the SEC may expedite the acceptance of TPLF, but special attention is necessary not to intermingle notions of fiduciaries into the …

When Borders Dissolve, Laura N. Coordes

Chicago-Kent Law Review

Scholars have long sought to apply principles from U.S. bankruptcy law to sovereign debt restructurings. Chapter 9 of the U.S. Bankruptcy Code, used to adjust the debts of municipalities, has been a particular source of inspiration, and several proposals currently exist to adapt chapter 9 to address the challenges of sovereign debt restructuring.

The difficulties of applying chapter 9 in practice, however, have demonstrated the limitations of a one-size-fits-all solution to municipal distress. Similarly, attempts to adapt chapter 9 to apply uniformly to a broad range of sovereign states may be ineffective. A recurring problem lies in the fact that …

The Avoidance Of Pre-Bankruptcy Transactions: An Economic And Comparative Approach, Aurelio Gurrea-Martínez

Chicago-Kent Law Review

Most insolvency jurisdictions provide several mechanisms to reverse transactions entered into by a debtor prior to the commencement of the bankruptcy procedure. These mechanisms, generally known as claw-back actions or avoidance provisions, may fulfil several economic goals. First, they act as an ex post alignment of incentives between factually insolvent debtors and their creditors, since the latter become the residual claimants of an insolvent firm, but they do not have any control over the debtor’s assets while the company is not yet subject to a bankruptcy procedure. Thus, avoidance powers may prevent or, at least, reverse opportunistic behaviors faced by …

Market Organisations And Institutions In America And England: Valuation In Corporate Bankruptcy, Sarah Paterson

Chicago-Kent Law Review

Courts in England and the United States have traditionally adopted different approaches to the question of valuation in debt restructuring cases. In England, courts have tended to determine whether to approve the allocation of equity in a debt restructuring by reference to the amounts creditors would have received if no debt restructuring had been agreed. The company has typically argued that if no debt restructuring had been agreed either the business or the assets would have been sold. Typically, some evidence of exposure of the business and assets to the market will be submitted to identify the value which would …

Time Bandits: The Seventh Circuit Gets It Wrong By Allowing Debt Purchasers To Escape Fdcpa Liability For Filing Time-Barred Proofs Of Claim In Chapter 13 Bankruptcies, Jeffrey Michalik

Chicago-Kent Law Review

Debt purchasers can use debtors’ bankruptcies to profit from stale, otherwise unenforceable debt. Although state statutes of limitations bar legal enforcement of this debt, predictable breakdowns of the bankruptcy process mean that the debtor might be forced to pay anyway. Courts have determined that this scheme does not violate the Fair Debt Collection Practices Act, allowing debt purchasers to continue this scheme without repercussion.

Unconscionable: Tax Delinquency Sales As A Form Of Dignity Taking, Andrew W. Kahrl

Chicago-Kent Law Review

No abstract provided.

Securitization Of Aberrant Contract Receivables, Thomas E. Plank

Chicago-Kent Law Review

Originators of traditional receivables, such as automobile loans, use securitization and structured finance debt transactions to obtain financing at lower net costs than traditional secured financing. The typical securitization or structured finance debt transaction combines (i) a sale of receivables to a separate, bankruptcy remote, special purpose legal entity (an “SPE”) and (ii) a loan to the SPE secured by the receivables. This combination produces lower net financing costs because the SPE’s lender can obtain repayment of its loan from the receivables while avoiding the costs that the Bankruptcy Code imposes on direct secured lenders to originators that could become …

Calling All Supreme Court Justices! It Might Be Time To Settle This "Rejection" Business Once And For All: A Look At Sunbeam Products V. Chicago American Manufacturing And The Resulting Circuit Split, Alexander N. Kreisman

Seventh Circuit Review

As effective and efficient bankruptcy proceedings have become increasingly important in recent years, so has the need to protect intellectual property licenses. The Bankruptcy Code allows the representative of a bankrupt estate, with the court's approval, to reject executory contracts. Although rejection has taken many forms over the years, its goal is to offer debtors and trustees with a means to maximize the value of the bankrupt estate's remaining assets. Rejection accomplishes this by treating contracts that contain unfulfilled obligations by both parties as having been breached by the representative of the bankrupt estate.

However, the implications of this breach …

Discharge Of Rcra Injunctive Claims In Bankruptcy: The Seventh Circuit's Decision In United States V. Apex Oil Co., Inc., Diana E. Rdzanek

Seventh Circuit Review

In its recent decision in United States v. Apex Oil, Inc., the Seventh Circuit considered whether an injunction under an environmental statute, even one that requires significant expenditures on the part of the debtor, could ever be a "right to payment" under the Bankruptcy Code, which would allow the claim to be discharged in the bankruptcy. The Seventh Circuit answered in the negative. Since the Supreme Court's decision in Ohio v. Kovacs, the federal circuits have disagreed on the discrete issue of when a claim arises for purposes of bankruptcy with respect to clean-up injunctions under environmental laws. …

Choice-Of-Law Rules In Bankruptcy: An Opportunity For Congress To Resolve Conflicting Approaches, Viktoria A. D. Ziebarth

Seventh Circuit Review

In In re Jafari, the Seventh Circuit had the opportunity to take a position on whether state or federal choice-of-law rules should be applied in bankruptcy cases. Instead, the court chose not to resolve the question because the outcome was the same under application of Wisconsin's choice-of-law rules and the federal common law choice-of-law rule used by the First and Ninth Circuits in bankruptcy and other federal question cases. The United States Supreme Court has never directly addressed whether state choice-of-law rules must be applied in bankruptcy. Furthermore, the Court has not extended its holding from Klaxon Co. v. …

Let's Get It Straight: The Effect Of Fehribach, The Ha2003 Liquidating Trust, And Joyce On A Debtor's Pre-Bankruptcy Professionals And Where To Go From Here, Jamie L. Johnson

Seventh Circuit Review

The Seventh Circuit has recently decided a trilogy of cases in which stockholders or creditors attempted to hold a business’s professionals—such as financial advisors and investment bankers—liable for the losses they suffered as a result of the business’s bankruptcy or financial demise. In all three of the cases, Fehribach v. Ernst & Young LLP, The HA2003 Liquidating Trust v. Credit Suisse Securities (USA) LLC, and Joyce v. Morgan Stanley & Co., the Seventh Circuit declined to hold the professionals liable, thereby eliminating a potential “deep pocket” for the creditors or stockholders. The outcomes of these cases were …