Law Commons^™

The Roles Of The Creditor And Debtor In The Settlement Process Of The Debtor's Financial Obligations Under The Debtor's Insolvency Law No. 19 Of 2019, Pierre Mallet Dr.

مجلة جامعة الإمارات للبحوث القانونية UAEU LAW JOURNAL

The UAE Cabinet approved a federal law to regulate cases of insolvency of natural persons or individuals. In 2016, the UAE government had adopted a similar insolvency law for companies which was widely welcomed by businesses and financial institutions. The legal framework for insolvency for both companies and individuals are expected to improve the competitiveness and the ease of doing business of the UAE. Debt restructuring for individuals under legal protection is widely seen as a great step forward in helping those who are unable to pay their debts from going bankrupt. “The approval of a new federal law to …

Scarlet-Lettered Bankruptcy: A Public Benefit Proposal For Mass Tort Villains, Samir D. Parikh

Northwestern University Law Review

Financially distressed companies often seek refuge in federal bankruptcy court to auction valuable assets and pay creditor claims. Mass tort defendants—including 3M, Johnson & Johnson, and Purdue Pharma—introduce new complexities to customary Chapter 11 dynamics. Many mass tort defendants engage in malfeasance that inflicts widespread harm. These debtors fuel public scorn and earn a scarlet letter that can destroy value for an otherwise profitable business. Scarlet-lettered companies could file for bankruptcy and quickly sell their assets to fund victims’ settlement trusts. This Article argues, however, that this traditional resolution option would eviscerate victim recoveries. Harsh public scrutiny has diminished the …

Going Concerns And Environmental Concerns: Mitigating Climate Change Through Bankruptcy Reform, Alexander Gouzoules

Faculty Publications

This article examines how legislative reforms to the Bankruptcy Code could mitigate the effects of climate change, speed the adoption of renewable energy, and contribute to U.S. compliance with the Paris Agreement of 2015. It analyzes the benefits derived by the fossil fuel industry from Chapter 11, which allows extractive firms to survive boom-and-bust cycles caused by volatile oil and gas prices. Insolvent polluters are preserved as going concerns during price collapses, only to resume and expand production as prices recover.

This article proposes novel legislative reforms to the Bankruptcy Code that would require insolvent fossil fuel producers to liquidate …

Generalized Creditors And Particularized Creditors: Against A Unified Theory Of Standing In Bankruptcy, David G. Carlson, Jeanne L. Schroeder

Articles

Courts have struggled toward a unified theory to explain when the trustee has exclusive jurisdiction to sue a third party for harms done to a bankrupt debtor, and when creditors have exclusive jurisdiction to sue the third party. Courts have proclaimed that when every creditor can sue the third party, then none of them can, and the right belongs solely to the trustee. Creditor rights are “generalized.” If only a proper subset of creditors can sue the third party, then the trustee is not able to subrogate to the subset. Such creditors are “particularized.” This paper proclaims the test a …

Bankruptcy As Social Safety Net, Pamela Foohey

Online Publications

One in ten Americans have filed bankruptcy at some point during their adult lives. Contrary to the pronouncements of some politicians, these filings do not reflect a series of personal failures and should not be understood as failures of character. Indeed, most of the people who file bankruptcy struggle for years to pay their debts before turning to bankruptcy law and courts for help. And most of the people who file say that they felt shame upon filing. Instead, the bankruptcy filings of millions and millions of people reflect systematic policy choices over the past forty years that have left …

May The Executive Branch Forgive Student Loan Debt Without Further Congressional Action?, Colin Mark

Journal of the National Association of Administrative Law Judiciary

On April 1, 2021, the Biden administration announced that Secretary of Education Michael Cardona will consider whether the President has legal authority to forgive up to $50,000 per debtor in student loan debt without further Congressional action. This paper interrogates the leading arguments for and against the Biden administration’s capacity to forgive this student loan debt strictly using administrative action. This article first surveys the history of federal student loan forgiveness programs in the United States. It then considers whether statutes on the books—in particular, the Higher Education Act of 1965 and the Federal Claims Collection Act of 1966—grant the …

The Long And Winding Road To The Small Business Reorganization Act: Why Our Next Stop Should Be Simplicity And Accessibility, Daniel O'Hare

West Virginia Law Review

No abstract provided.

When Is A Debt "Obtained By" Fraud?: Reconsideration Of The Fraud Nondischargeability Exception Under Section 523(A)(2) Of The Bankruptcy Code, Theresa J. Pulley Radwan

West Virginia Law Review

No abstract provided.

The Impending Collision Of Smart Contracts And The Automatic Stay, Carter D. Wietecha

Notre Dame Law Review

This Note begins by briefly examining the nature and function of smart contracts, including how they have changed over time. Next, it evaluates the relevant language of Code provisions dealing with the automatic stay and discusses decisions treating the interaction of early generation smart contracts with the automatic stay. It concludes with a discussion of how the Supreme Court’s recent decision in City of Chicago v. Fulton has significantly changed the legal landscape for smart contracts and how the automatic stay will likely interact with smart contracts in the near future.

Allocation Of Property Appreciation: A Statutory Approach To The Judicial Dialectic, Lawrence Ponoroff

William & Mary Business Law Review

Many, perhaps the majority, of Chapter 13 cases end up being converted to Chapter 7. The converted Chapter 7 case is not a new case, it is a continuation of the case that was commenced with the filing of the original Chapter 13 petition. However, there are important structural differences between the two chapters, including over what constitutes property of the estate. This creates some thorny issues surrounding whether property of the estate as generally defined in section 541(a) of the Bankruptcy Code or property of the estate as specifically defined in Chapter 13 controls in determining the scope of …

Portraits Of Bankruptcy Filers, Pamela Foohey, Robert M. Lawless, Deborah Thorne

Articles

One in ten adult Americans has turned to the consumer bankruptcy system for help. For almost forty years, the only systematic data collection about the people who file bankruptcy has come from the Consumer Bankruptcy Project (CBP), for which we serve as co-principal investigators. In this Article, we use CBP data from 2013 to 2019 to describe who is using the bankruptcy system, providing the first comprehensive overview of bankruptcy filers in thirty years. We use principal component analysis to leverage these data to identify distinct groups of people who file bankruptcy. This technique allows us to situate the distinctions …

Chief Loophole Officer Or Chief Legal Officer: Inside Lehman Brothers—A Film Case Study About Corporate And Legal Ethics, Garrick Apollon

St. Mary's Journal on Legal Malpractice & Ethics

This Article discusses the continuing legal education (CLE) visual advocacy documentary-style program, which Garrick Apollon (author of this Article) researched and developed. The case study for this CLE documentary-style program is the film Inside Lehman Brothers—a documentary film by Jennifer Deschamps which chronicles the story of the Lehman whistleblowers. The film presents Mathew Lee, former senior vice president overseeing Lehman’s global balance sheet; Oliver Budde, former in-house counsel (associate general counsel) of the Lehman Brothers; and the racialized female mid-tier manager whistleblowers, who all paid a steep price in the 2008 American subprime mortgage crisis, while many of the …

Riding The Wave: Fairness For Foreign Investors In India’S Impending Insolvency Tsunami, Nicole Mecca

Fordham Journal of Corporate & Financial Law

Reminiscent of the warning signs of a tsunami, bankruptcy and insolvency courts across the globe have been eerily calm despite unprecedented conditions during the COVID-19 pandemic. The full extent of the pandemic’s effect, including a tidal wave of wide-spread corporate and financial sector harm and wide-spread economic distress, remains to be seen. Much like victims of natural disasters, unsuspecting and increasingly delayed courts will find themselves totally overwhelmed. The inconvenience felt by the courts is distinct, however, from potential harm to financial investors. Although investors could also be harmed by these judicial conditions, they knowingly assumed certain financial risk when …

Sometimes, The House Loses: Caesars In Chapter 11, Mitchell Gladstein, Christian Wilkinson

Chapter 11 Bankruptcy Case Studies

No abstract provided.

Bankruptcy & The Benefit Corporation, Christopher D. Hampson

UF Law Faculty Publications

As pressure grows for money-making businesses to prioritize social responsibility, the benefit corporation - a recent innovation in corporate governance - promises to require the directors of socially minded businesses to balance public benefit with shareholder interests. But will that promise survive the crucible of financial distress? While most discussions of the benefit corporation give only passing treatment to insolvency (or ignore it altogether), this Article provides the first complete analysis of how bankruptcy principles would apply to benefit corporations, informed by the practical context of out-of-court workouts and negotiations that take place in the shadow of the bankruptcy laws. …

A Hotel Does Not Meet The Definition Of "Single Asset Real Estate" And May Reorganize Under Subchapter V Of Chapter 11 Of The Bankruptcy Code, Patrick Canavan

Bankruptcy Research Library

(Excerpt)

Enacted via the Small Business Reorganization Act ("SBRA") in 2019, Subchapter V streamlines the reorganization process, allowing small business debtors to file bankruptcy in a timely and cost-effective manner. The goal behind the legislation is to encourage reorganizations, which will generally result in creditors receiving a higher distribution than in a liquidation and more small businesses surviving. Section 1182(1) of title 11 of the United States Code (the "Bankruptcy Code") limits those who can file a Subchapter V case to a "small business debtor" who does not own a "single asset real estate" project ("SARE"). Thus, if the debtor …

Courts Apply A Case-By-Case Analysis In Distinguishing A Meritorious Motion To Disqualify From A Delaying Litigation Tactic, Cathrena Collins

Bankruptcy Research Library

(Excerpt)

It is becoming increasingly rare for an attorney to remain at the same firm for an entire career. Lateral movements of lawyers coupled with large firms employing hundreds of attorneys creates ample opportunity for conflicts of interest to arise. The American Bar Association explains a conflict of interest is present when "there is a significant risk that a lawyer's ability to consider, recommend or carry out an appropriate course of action for the client will be materially limited as a result of the other lawyer's responsibilities or interest." Furthermore, Rule 1.10(b) dictates that a lawyer joining a new firm …

The Various Methods Circuit Courts Use To Define "Initial Transferee" In Fraudulent Transfers, Anthony J. Crasto

Bankruptcy Research Library

(Excerpt)

Transfers of a debtor's interest or obligation in property to a third party, made to prevent creditors from reaching assets in a bankruptcy case, are known as fraudulent transfers. Under current law, there are two types of fraudulent transfers: actual fraud and constructive fraud. Actual fraud requires findings of a debtor's "intent to hinder, delay, or defraud any entity to which the debtor was or became, on or after the date that such transfer was made or such obligation was incurred, indebted." Constructive fraud does not require a finding of intent and occurs when a debtor receives "less than …

Chapter 15 Recognition Is Necessary For Efficient And Consistent Cross-Border Proceedings, Sarah Franzetti

Bankruptcy Research Library

(Excerpt)

When Chapter 15 of title 11 of the United States Code (the "Bankruptcy Code") was adopted in 2005, it repealed the former section 304, which had often led to ad-hoc and inconsistent rulings for foreign debtors seeking assistance in U.S. bankruptcy courts. The new Chapter was passed to achieve greater efficiency on a domestic scale, as well as the "fair and efficient administration of cross-border insolvencies" by promoting greater cooperation between U.S. and foreign courts. For a foreign debtor to reap the benefits of this cooperation, a representative of the foreign bankruptcy proceeding must petition a U.S. bankruptcy court …

Erisa Withdrawal Liability Claims Unlikely To Receive Administrative Expense Priority Status In A Chapter 11 Reorganization, Bridget Golden

Bankruptcy Research Library

(Excerpt)

An employer who withdraws their participation in a multi-employer defined benefits plan is statutorily required to pay the plan a withdrawal liability. Employee Retirement Income Security Act of 1974 ("ERISA"), as amended by the Multiemployer Pension Plan Amendments Act of 1980 ("MPPAA"), provides a number of formulas to assist a multi-employer defined benefits plan's actuary with calculating the withdrawal liability amount. Congress imposed withdrawal liability on withdrawing employers "(1) to protect the interests of participants and beneficiaries in financially distressed multiemployer plans, and (2) ... to ensure benefit security to plan participants." An employer's ability-and willingness-to pay withdrawal liability …

Enforceability Of Third-Party Releases In Foreign Proceedings Under Chapter 15, Anastasia Greer

Bankruptcy Research Library

(Excerpt)

In our increasingly globalized world, cross-border insolvency proceedings brought under chapter 15 (herein "Chapter 15") of title 11 of the United States Code (the "Bankruptcy Code") are on the rise - with over 100 additional filings in 2020 alone. Third-party releases are provisions in bankruptcy plans intended to release non-debtors (including shareholders, directors, officers, and affiliates) from claims creditors hold against other members of their class. A third­ party release can "act as a complete release, waiver, and discharge of that party ... arising out of or in connection with the debtor and its plan of reorganization." While the …

The Approval Of Retirement Contributions In Chapter 13 Payment Plans, Jennifer Hepner

Bankruptcy Research Library

(Excerpt)

In the United States, employees often contribute a portion of their annual income to their 401(k) retirement plans. These contributions may fluctuate based on age, income, or additional contributions by employers. At the same time, chapter 13 debtors are often required to pay at least a portion of what is owed to creditors as part of their court-approved payment plans. A court will only approve a debtor's chapter 13 payment plan if a debtor contributes all of his "projected disposable income" to pay creditors over the "applicable commitment period." While disposable income is defined as the "current monthly income …

Analysis Of Courts' Discretion To Enforce Arbitration Of Core Claims, Sarah L. Hautzinger

Bankruptcy Research Library

(Excerpt)

In general, a bankruptcy court has original and exclusive jurisdiction of chapter 11 bankruptcy cases. However, problems arise when a prepetition contract contains an arbitration clause, and a court must decide if it has discretion to enforce arbitration of a core claim. The statutes that play essential (but competing) roles in a court's analysis are the Federal Arbitration Act ("FAA") and the United States Bankruptcy Code (the "Bankruptcy Code"). In sum, "bankruptcy policy exerts an inexorable pull towards centralization while arbitration policy advocates a decentralized approach toward dispute resolution."

In these cases, a bankruptcy court must determine if there …

Assessing The Two Tests Courts Use To Determine Dischargeability Of Student Loan Debt, Sean B. King

Bankruptcy Research Library

(Excerpt)

The purpose of bankruptcy is to give honest debtors a “fresh start.” For debtors with student loans this purpose is not automatic, rather, the viability of the student loan programs takes precedence. For student loans, the default rule is they are not dischargeable in bankruptcy. Title 11 of the United States Code (the “Bankruptcy Code”) spells this out. Under section 523(a)(8) of the Bankruptcy Code, student loans must create an “undue hardship” to be discharged.

The issue is how courts determine undue hardship under section 523(a)(8). The term “undue hardship” is not defined in the Bankruptcy Code, rather, it …

Ownership Status Of Inherited Retirement Accounts In Bankruptcy, Aron Kaplan

Bankruptcy Research Library

(Excerpt)

Immediately upon filing a petition for relief under title 11 of the United States Code (the “Bankruptcy Code”), a bankruptcy estate is created by operation of law that consists of the debtor’s assets from which the creditors will be repaid. The Bankruptcy Code states that the estate includes “all legal or equitable interests of the debtor in property as of the commencement of the case.” This broad language reflects Congress’s intent that there be sufficient assets in the estate to protect the interests of creditors.

Despite this broad legislative language, there are certain categories of property that the debtor …

Private Student Loans May Be Dischargeable In Bankruptcy Without Meeting The Undue Hardship Requirement And If Not, There Are Two Ways To Prove Undue Hardship, Kimberly Lee

Bankruptcy Research Library

(Excerpt)

Section 523 of title 11 of the United States Code (the “Bankruptcy Code”) prevents former students from discharging certain educational debts in bankruptcy, unless the failure to discharge “would impose an undue hardship on the debtor and the debtor’s dependents.” Typically, it is a debtor’s burden to show that their loans may be discharged on the grounds of “undue hardship.” However, Congress has not defined “undue hardship” leaving jurisdictions divided regarding the appropriate test. Most courts have followed the Brunner three-prong test, while only the First and Eighth Circuits use the totality of the circumstances test.

Additionally, section 523(a)(8) …

A Foreign Debtor Who Lacks Permanent Residence In The U.S. May Qualify For Florida’S Homestead Exemption, Jenna Kirkland

Bankruptcy Research Library

(Excerpt)

The home has special significance under Florida law, as public policy favors property ownership, citizen independence, and preserving a home where a family can be sheltered and “live beyond the reach of economic misfortune.” Generally, once an individual files for bankruptcy, all property of the debtor becomes property of the estate. However, Section 522 of title 11 of the United States Code (“Bankruptcy Code”) allows a debtor to exempt certain property from the estate. The Bankruptcy Code permits states to opt out of the federal exemption scheme provided. Florida is one of the states that has opted out, therefore …

Age As A Factor In Determining Discharge Of A Debtor’S Student Loan Debt, Julia Merani

Bankruptcy Research Library

(Excerpt)

Title 11 of the United States Code (the “Bankruptcy Code”) provides for debtors a “fresh start” by allowing the discharge of most debt. To obtain a discharge of student loan debt, a debtor must demonstrate “undue hardship.” If the debt is not discharged, it must still be paid. The phrase “undue hardship” is not defined in the “Bankruptcy Code and congressional record provides little guidance as to what constitutes undue hardship . . . .” Even though Congress created a single standard for discharging student loan debt; the circuit courts have adopted different tests to determine if the undue …

The Split In The Application Of Section 109(A) Requirements To Chapter 15 Cases, Kate Long

Bankruptcy Research Library

(Excerpt)

Chapter 15 of title 11 of the United States Code (the “Bankruptcy Code”) governs recognition of foreign bankruptcy, insolvency, and debt-restructuring proceedings. Section 1517 of the Bankruptcy Code generally sets forth the requirements for recognition. In addition to those requirements, some courts have held that a foreign debtor must satisfy traditional debtor eligibility requirements for a debtor’s foreign proceeding to be recognized under Chapter 15. Other courts disagree and hold that a foreign debtor does not need to meet the traditional requirements for its foreign proceeding to be recognized under Chapter 15.

This memorandum explores the applicability of the …

Granting Derivative Standing To A Creditors’ Committee, Jordan Milite

Bankruptcy Research Library

(Excerpt)

A party has “standing” (the right to challenge the conduct of another in court) when that person or entity has suffered an “injury in fact.” “Derivative standing” is when a person or entity other than the harmed party steps in to assert the claim in place of the harmed party. In a case under Chapter 11 of Title 11 of the United States Code (the “Bankruptcy Code”), a bankruptcy court may grant derivative standing to a creditors’ committee or similar body, rather than the bankruptcy estate itself, to bring a claim on behalf of a debtor’s estate. This often …