Banking and Finance Law Commons^™

Enron At The Margin, William H. Widen

Articles

No abstract provided.

The Implied Waiver Solution To The Problem Of Privilege In The Individual Bankruptcy Case, Laura B. Bartell

Law Faculty Research Publications

No abstract provided.

Impossible, Impracticable, Or Just Expensive? Allocation Of Expense Of Ancillary Risk In The Cmbs Market, 36 J. Marshall L. Rev. 653 (2003), Georgette Chapman Poindexter

UIC Law Review

No abstract provided.

Making Sense Of Successor Liability, Marie T. Reilly

Faculty Scholarship

A firm that buys assets from another firm ordinarily does not acquire liability to the seller's creditors simply by buying its assets. This ordinary rule is subject to important exceptions. The buyer's consent triggers an exception. If a buyer agrees to assume the seller's liability to third parties, it is for that reason liable. This article considers a more controversial exception - successor liability. When a court decides that an asset acquirer should be treated as a "successor" to the transferor, it is liable for the transferor's debts as though it were the transferor.

Reorganizations And Stochastic Collateral Value, Royce De R. Barondes

Faculty Publications

Bebchuk and Fried propose using a series of auctions to implement a market-based methodology for valuing secured claims in a reorganization. This Article demonstrates their procedure can result in a secured creditor receiving more than its ex ante bargain, and that the probability distribution of possible collateral values can be relevant to fulfilling the ex ante bargain. This Article further develops and examines a refinement of the Bebchuk and Fried procedure that provides an approximate solution to the overcompensation of secured creditors. This refinement reconceptualizes collateral as comprising two components: (i) a call option on that property, exercisable at the …

Why Warn? – The Worker Adjustment And Retraining Notification Act In Bankruptcy, Laura B. Bartell

Law Faculty Research Publications

The Worker Adjustment and Retraining Notification ("WARN") Ace was enacted by Congress in 1988 to provide limited protections to workers whose jobs are suddenly and permanently terminated. The WARN Act generally precludes an "employer" from ordering a "plant closing or mass layoff" until the expiration of a sixty-day period after giving written notice of such proposed action. Pursuant to legislative directive, the Department of Labor ("Department") promulgated a final rule in 1989 interpreting the provisions of the statutory language. Although neither the WARN Act itself nor the final rule makes any reference to bankrupt employers, in the preamble to the …

Optimal Bankruptcy In A Non-Optimal World, Richard M. Hynes

Faculty Publications

Consumer bankruptcy insures individuals against misfortune. Like other forms of insurance, bankruptcy reduces an individual's incentive to guard against misfortune and provides her with an incentive to overstate her need for relief. The "first-best," or optimal, bankruptcy system, like the first-best tax or public assistance system, solves these moral hazards without any loss of efficiency. In bankruptcy, this first-best approach would deny relief to debtors responsible for their own distress and reduce the deserving debtors' obligations to an amount commensurate with their ability to pay. While the Bankruptcy Code tries (in part) to follow this first-best approach, such a utopian …

What Enron Means For The Management And Control Of The Modern Business Corporation: Some Initial Reflections, Jeffrey N. Gordon

Faculty Scholarship

The Enron case plays on many different dimensions, but its prominence is not merely part of popular culture's obsession with scandal du jour. Rather, the Enron situation challenges some of the core beliefs and practices that have underpinned the academic analysis of corporate law and governance, including mergers and acquisitions, since the 1980s. These amount to an interlocking set of institutions that constitute "shareholder capitalism," American-style, 2001, that we have been aggressively promoting throughout the world. We have come to rely on a particular set of assumptions about the connection between stock market prices and underlying economic realities; the reliability …

21st Annual Conference On Legal Issues For Financial Institutions, Office Of Continuing Legal Education At The University Of Kentucky College Of Law

Continuing Legal Education Materials

Materials from the 21st Annual Conference on Legal Issues For Financial Institutions held by UK/CLE in April of 2001.

Revised Article 9, Securitization Transactions And The Bankruptcy Dynamic, Lois R. Lupica

Faculty Publications

Article 9 of the Uniform Commercial Code ("U.C.C.")1 is the law governing the creation, perfection, and enforcement of security interests in personal property. Originally enacted in 1960,2 Article 9 was substantially revised in 1972 in response to changes in commercial financing markets and practices. Since this last revision, there have been further changes, including technological advances, affecting commercial practice and custom. These changes have led the Permanent Editorial Board for the U.C.C. ("PEB") to recommend to the American Law Institute ("ALI") and the National Conference of Commissioners on Uniform State Laws ("NCCUSL") that Article 9, once again, be significantly revised. …

The Lease Of Money In Bankruptcy: Time For Consistency?, Laura B. Bartell

Law Faculty Research Publications

No abstract provided.

Getting To Waiver – A Legislative Solution To State Sovereign Immunity In Bankruptcy After Seminole Tribe, Laura B. Bartell

Law Faculty Research Publications

No abstract provided.

Will Exploding Guaranties Bomb?, Marshall E. Tracht

Articles & Chapters

Springing and exploding guaranties - insider guaranties that will become due ifand when a borrower files for bankruptcy - have become popular as "bankruptcy-proofing" devices, yet there is little case law or literature on their enforceability. This article reviews the limited existing law on these bankruptcy-contingent guaranties and examines some of the arguments against their enforceabiltiy that can be expected to be made in the future.

The Use Of Intellectual Property As Collateral: Gap In The Perfection Of A Security Interest, Sofia Benammar

LLM Theses and Essays

The purpose of the present thesis is to let French lawyers know which step they need to take in order to best assist their client in securing a more solid investment. Lenders want to be protected. Lenders want to be sure that they can use the intellectual property rights in a commercial environment free from superior claims by third parties. In other words, a lender who provides a large loan to a borrower wants to know how and where its security interest will be perfected and what is the best way for him to have priority over other claims. This …

The Legal Regulation Of Hedge Funds In The United States Long-Term Capital Management Episode, Jong Cheol Park

LLM Theses and Essays

Mutual funds and hedge funds are popular forms of investment in the United States and throughout the world. Mutual funds are regulated by securities' regulators in the United States. Hedge funds, however, are not regulated because of their operational flexibility in investment. U.S. regulators are concerned that if they regulate hedge funds, hedge funds will, along with their economic benefits, emigrate to offshore havens. However, if we consider the importance of the American financial markets in the world, this idea can be dismissed. Due to globalization in the capital markets, small events in the United States can have large effects …

Letters Of Credit, Voidable Preferences, And The Independence Principle, William H. Widen, David Gray Carlson

Articles

No abstract provided.

The Earmarking Defense To Voidable Preference Liability: A Reconceptualization, William H. Widen, David Gray Carlson

Articles

No abstract provided.

The Earmarking Defense To Voidable Preference Liability: A Reconceptualization, David G. Carlson, William H. Widen

Articles

The article argues that the earmarking doctrine, a judge-created exception to 547b liability, should be reinterpreted under 547c1 of the Bankruptcy Code. It posits that the doctrine's current reliance on vague concepts like "control" is legally unsound and inconsistent with statutory intent. By aligning earmarking with the contemporaneous exchange defense under 547c1, the analysis would focus on the parties' intent and the timing of the exchange, eliminating the need for the controversial control criterion. This approach would bring clarity and consistency to bankruptcy law, preventing arbitrary outcomes and ensuring compliance with the Bankruptcy Code.

Roundtable Discussion, David Aronofsky, Barry S. Engel, Eric Henzy, Gideon Rothschild, Jeffrey A. Schoenblum

Vanderbilt Journal of Transnational Law

Welcome to the Roundtable panel discussion. Each of the speakers is going to open with a few minutes statement. And then we're going to pose some questions to open discussion, so it will take people through the whole asset protection route from beginning to end, hopefully. And then, any questions you may have we believe we'll have sufficient time to ask those questions and have them answered. You may get very different views. And then we've just decided that the jury will decide whether asset protection trusts are a good thing or a bad thing. Okay. So pay attention.

Game Of High Stakes Roulette: Credit Card Companies Cash In On Gamblers' Bad Luck, 32 J. Marshall L. Rev. 1197 (1999), Maya Hoffman

UIC Law Review

No abstract provided.

Flight And Fugitive Issues In Bankruptcy Fraud Cases, Angela J. Davis

Scholarly Articles in Law Reviews & Journals

No abstract provided.

Derivatives And Risk Framework, Ravichandra Vasant Kini

LLM Theses and Essays

The purpose of this thesis is to explore the dynamics of the fast-growing international financial markets and to study in particular the risks associated with the different kinds of financial instruments. The Barrings Bank Crisis, Proctor and Gamble, Gibson Greetings cases against Bankers Trust, and the Orange County Bankruptcy has prompted regulatory authorities to focus on the risks involved in the derivatives markets. In this paper, the first chapter explains the basic working of the different kinds of derivative instruments especially concentrating on Swaps, Futures, and Options. The second chapter goes on to explain, the risks involved in the uses …

Failure And Forgiveness: A Review, James J. White

Reviews

In Failure and Forgiveness, Professor Karen Gross has written two books about bankruptcy. The first book, found in the first nine chapters, describes the bankruptcy law, the bankruptcy system, its operation, and the policies that support that law and system. This first book is written for a lay audience, and it is an admirable exposition of the law and policy. The second book, chapters ten to fifteen, contains several proposals for change in the bankruptcy law and states arguments to justify those proposals. The second book shows Professor Gross to be a kindly socialist, deeply suspicious of free markets and …

Taking Future Claims Seriously: Future Claims And Successor Liability In Bankruptcy, Frederick Tung

Faculty Scholarship

Treatment of contingent tort liabilities when a business is sold presents a particular challenge for corporate and bankruptcy law. In this article, I focus on the precarious position of future tort claimants-those who may be harmed by a manufacturer's defective product after the manufacturer has sold its business and disappeared. By the time the future claimant's injury occurs, she may be left with no means of recovery. While the article focuses primarily on the bankruptcy sale context, a discussion of the nonbankruptcy context provides important background.

In the article, I make two claims. First, I address recent proposals suggesting that …

The Past And Future Of Kentucky's Fraudulent Transfer And Preference Laws, Douglas C. Michael

Law Faculty Scholarly Articles

An important part of the law of creditors' remedies is the ability of creditors to recover property formerly held by the debtor, but transferred to others under circumstances that are considered to be unfair or inequitable. There are two principal ways a creditor can seek to have a debtor's transfer characterized as unfair in order to recover it. First, a transfer to another creditor or a third party can be fraudulent as to one or all of the remaining creditors, or may be deemed to be fraudulent because of the circumstances surrounding the transfer, such as a transfer made by …

To Love, Honor, And (Oh) Pay: Should Spouses Be Forced To Pay Each Other's Debts?, A. Mechele Dickerson

Faculty Publications

No abstract provided.

Debtors' Good Faith In Us Bankruptcy Proceedings, Chen Yang

LLM Theses and Essays

Bankruptcy is a judicial process purporting to regulate and adjust the financial relationships between debtors and creditors which come into a deadlock. In the modern United States, bankruptcy has become a concept pervading each corner of the social and economic lives. It touches mass tort victims, large corporations, small family business, government institutions, and even normal individuals. The appearance of the modern bankruptcy law of the United States is signaled by the enactment of the Bankruptcy Reform Act in 1978 which, together with later amendments, constitute the current Bankruptcy Code of the United States; but also help them strategically restructure …

Reconciling The Dormant Conflict: Crafting A Banking Exception To The Fraudulent Conveyance Provision Of The Bankruptcy Code For Bank Holding Company Asset Transfers, Cassandra Jones Havard

All Faculty Scholarship

Banking law and bankruptcy law clash. This is most evident when a bank holding company (parent company) becomes insolvent after it has made an asset transfer to its financially troubled bank subsidiary.

The Bankruptcy Code (Code) governs the insolvency proceedings of the bank holding company. Predictably, the parent company's trustee, appointed for the protection of all the creditors of the bankrupt entity, uses the fraudulent conveyance provision of the Code to have any asset transfers that were made to the bank subsidiary returned to the debtor's estate. The good faith exception to that provision will protect the asset transfer only …

The Truth About Secured Financing, Robert E. Scott

Faculty Scholarship

The debate over the social value of secured credit (and the appropriate priority for secured claims in bankruptcy) is entering its nineteenth year. Yet the continuing publication of succeeding generations of articles exploring the topic have yielded precious little in the way of an emerging scholarly consensus about the nature and function of secured credit. Put simply, we still do not have a theory, of finance that explains why firms sometimes (but not always) issue secured debt rather than unsecured debt or equity. Moreover (and perhaps because of the lack of any plausible general theory), we lack any persuasive empirical …

Local Government Finance Issues, Oregon Law Institute, Stephen T. Janik, Adrianne Brockman, David E. Erickson, Stephen Altshin, Dan Olsen, Richard Slottee, Sanford Landress, Kenneth E. Iltz, Timothy J. Sercombe, John H. Nelson, Paul Bleeg

Oregon Law Institute, 1995

Course Materials from the May 19, 1995 Program in Portland