Banking and Finance Law Commons^™

Réflexions Sur La Monnaie Et La Banque Au Liban, Antoine Merheb

Proche-Orient, Études juridiques

Banks and currencies have always been intimately linked and the problems suffered by one affect inevitably the other. This article which recalls the history of the contemporary national currency tries to enlighten the causes of the most serious monetary crisis that Lebanon has incurred since its independence in 1943 and the deleterious effects of this crisis on the Lebanese banking sector which is, in part, responsible for having blindly followed, not always under duress, the policy drawn up by the central bank and which only found, to escape total bankruptcy, to hang on to the unlimited liberating power of a …

Bankrupt Crypto Organizations, Kara Bruce, Christopher K. Odinet, Andrea Tosato

Faculty Scholarship

This Article provides the first comprehensive analysis of the intersection between decentralized autonomous organizations (DAOs) and American bankruptcy law. DAOs are blockchain-based entities that enable individuals to pursue common goals using decentralized decision-making and automated governance. Since their recent emergence, DAOs have proliferated dramatically—with over 20,000 organizations managing over $20 billion in assets and engaging in activities ranging from investment management to real estate and even attempting to purchase historic copies of the U.S. Constitution. Yet like any other organization, DAOs can fail, creating an urgent need to understand what happens when unstoppable code meets immovable bankruptcy law.

Our investigation …

Judging Bankruptcy Without Distress, Jack Zarin-Rosenfeld

University of Cincinnati Law Review

In Harrington v. Purdue Pharma, the United States Supreme Court rejected the bankruptcy plan of OxyContin producer Purdue Pharma, which purported to settle claims against both Purdue (the bankruptcy debtor) and Purdue’s individual owners and managers, all members of the Sackler family who had not themselves filed for bankruptcy (the Sackler Release). Concluding that the United States Bankruptcy Code does not authorize settlement of claims against non-debtors without claimant consent, the Harrington Court appeared set to stem the tide of “bankruptcy without distress,” a flourishing practice in which solvent non-debtors (like the Sacklers) would settle their liabilities within the …

Crypto In The Courtroom: A Legislative Framework For Managing Crypto Assets In Bankruptcy, Katelyn E. Barker

University of Miami Law Review

The rapid rise and subsequent collapse of the cryptocurrency market exposed a critical shortcoming of bankruptcy law: the absence of clear guidelines for the treatment of crypto assets. The Bankruptcy Code—which predates the invention of crypto—fails to account for the unique complexities of crypto assets. Although several crypto bills have been introduced, they fall short of adequately confronting the complex and evolving challenges of crypto bankruptcies. The lack of guidance has forced courts to make consequential decisions with no clear direction, leading to inconsistent outcomes in areas such as crypto asset ownership, valuation, and customer protections.

This Note examines bankruptcy …

Improvident Credit Extension: A New Legal Concept Aborning?, Vern Countryman

Maine Law Review

The latest triumph of our modified free enterprise system is consumer credit which, including home mortgages, has burgeoned from $30 billion since the end of 1945 to more than $569 billion in March 1974. In 1946 the total cost to consumers for interest and debt retirement was $10 billion, or six percent of family income. By 1966 it was $110.6 billion, or twenty-two percent of family income. By 1971 installment debt charges accounted for from twenty to thirty-nine percent of disposable income for five percent of our families and for forty percent or more of disposable income for another two …

Debt Tokens, Andrea Tosato, Diane Lourdes Dick, Christopher K. Odinet

Faculty Scholarship

The worlds of crypto and bankruptcy have collided. Once-prominent, fast-growing, and even politically influential platforms for trading cryptocurrencies have imploded spectacularly. Gone are the glossy advertisements, celebrity endorsements, and proclamations that blockchain operates as a law unto itself. Instead, insolvent crypto businesses—including the crypto exchange giant FTX—find themselves in bankruptcy court, no different from any other failed enterprise. These bankruptcies reveal a startling reality: individual investors who placed their trust in these platforms have been stripped of their digital assets. In their stead, they hold hard-to-collect claims against these defunct platforms.

Amid the chill of the crypto winter, bankruptcy has …

Corporate Evolution, Omari Scott Simmons

Cardozo Law Review

Political entrepreneurs have declared war on environmental, social, and governance policies ("ESG"), going so far as to attempt to criminalize ESG-influenced investing. They seek a return to some real or imagined past. They amplify and elevate their efforts into mainstream public discourse. They pursue extraordinary goals and tactics to disrupt and even dismantle institutional structures, norms, and established processes. The contemporary anti-ESG backlash is not simply a battle over corporate purpose and the dueling perspectives of shareholder primacy versus stakeholderism or disputes concerning sustainable investment and operational strategies. It reflects aggressive political entrepreneurship and the tension between competing narratives: stasis, …

Equity And Clarity: The Impact Of Tyler V. Hennepin County On Property Taxation And Homeowners’ Rights, Analy Feigel

Cardozo Law Review

This Note explores the implications ofthe U.S. Supreme Court's ruling in Tyler v. Hennepin County, which significantly impacts property taxation and foreclosure laws. The Court ruled that property owners are entitled to surplus proceeds following a tax foreclosure, setting a new precedent by deeming it unconstitutional for governments to retain surplus proceeds without just compensation. Tyler clarified property rights under the Fifth Amendment, affirming that owners have a constitutional right to the surplus value of their foreclosed properties, even if local statutes do not explicitly allow it.

Further, this Note also addresses unresolved issues following Tyler's ruling, including how the …

False Venue Claims Signed Under Penalty Of Perjury, Lynn M. Lopucki

UF Law Faculty Publications

In a study of venue for the one hundred ninety-five large, public company bankruptcies filed from 2012 through 2021, I discovered nine cases (5 percent) in which the companies’ venue claims were in apparent conflict with what the debtors themselves stated on their petitions to be the locations of the companies’ principal places of business and principal assets. Nor were the venue claims justified by domicile. Eight of the nine proceeded to confirmation in an improper venue.

Although it is routine for large, public companies and the courts in which they file to ignore the Bankruptcy Code and Rules, these …

Debt Tokens, Andrea Tosato, Diane Lourdes Dick, Christopher K. Odinet

Faculty Journal Articles and Book Chapters

The worlds of crypto and bankruptcy have collided. Once-prominent, fast growing, and even politically influential platforms for trading cryptocurrencies have imploded spectacularly. Gone are the glossy advertisements, celebrity endorsements, and proclamations that blockchain operates as a law unto itself. Instead, insolvent crypto businesses—including the crypto exchange giant FTX—find themselves in bankruptcy court, no different from any other failed enterprise. These bankruptcies reveal a startling reality: individual investors who placed their trust in these platforms have been stripped of their digital assets. In their stead, they hold hard-to-collect claims against these defunct platforms. Amid the chill of the crypto winter, bankruptcy …

When The Bank Wants Its Borrower In Bankruptcy: Benefits Of Bankruptcy For Lenders And Lender Liability Defendants, David C. Hillman, Matthew L. Caras

Maine Law Review

Bankruptcy features such as the automatic stay and the avoidance powers have traditionally caused lenders to look with disfavor upon the commencement by a borrower of a case under the Bankruptcy Code and have caused lenders to consider only as a last resort the alternative of exercising their right to commence an involuntary bankruptcy against a borrower. Yet circumstances exist where lenders might obtain substantial benefits and advantages from dealing with a problem loan in the context of a borrower's bankruptcy case, particularly in light of the increasing number of lender liability lawsuits that have been initiated during the past …

A Reply To David Jones, Dennis M. Patterson

Maine Law Review

During my years of practice in Maine, I had the pleasure of litigating most of the issues discussed in my book, Maine Debtor-Creditor Law, with many members of Maine's fine commercial and bankruptcy law bar. Among the lawyers with whom I litigated these questions is David Jones. In fact, one of the cases we litigated, a particularly thorny foreclosure action, was the impetus of an article that became portions of two of the chapters in my book. It is against this background that I was pleased to learn that one of my old adversaries from practice had agreed to review …

Dei As Cultural Commitment In An Era Of Backlash, Christopher D. Hampson, Elise Bernlohr Maizel

UF Law Faculty Publications

In 2023, shortly after the U.S. Supreme Court ended affirmative action in college admissions in the companion cases Students for Fair Admissions Inc. v. President & Fellows of Harvard College and Students for Fair Admissions Inc. v. University of North Carolina (SFFA), conservative officials and activists began threatening (and taking) legal action against private law firms, arguing that their diversity, equity and inclusion (DEI) programs violated state and federal law. This development should matter to bankruptcy lawyers, both as citizens of our own law firms and as counsel to companies in financial distress. We hope that this rolling assault on …

A Look Back In Time: Analyzing The Success And Value Of The 2014 Amendments To Rule 2a-7 And Reporting On Form N-Cr In Light Of The March 2020 Market Events, Jocelyn Near

Catholic University Law Review

Money market funds have frequently been a target of regulation by the Securities and Exchange Commission (“SEC”). Perhaps the most expansive regulation came as a response to the 2008 financial crisis, in which the Reserve Primary Fund “broke the buck.” The SEC’s misguided 2014 reforms exacerbated the inherent risks of money market funds, including the risk of runs and first mover advantage, particularly with the implementation of Form N-CR. Form N-CR requires a money market fund to publicly report when various events occur, including when a retail or government money market fund’s current net asset value per share deviates downward …

In The Midst Of Bankruptcy: How Cryptocurrency's Classification Affects Creditors Who Were Once Customers, Mia Qu

Washington Law Review

In 2022, Congress proposed the Digital Commodities Consumer Protection Act to amend the Commodity Exchange Act and define a new type of commodity: digital commodity. The definition of digital commodity encompasses cryptocurrency and provides the Commodity Futures Trading Commission with jurisdiction over digital asset transactions. This definition of digital commodity has two important implications. First, it signals the lawmakers’ tendency to generalize cryptocurrency as a commodity. Second, it brings complications into how creditors—especially individual crypto account holders—can recover in the recent bankruptcy cases involving prominent crypto companies. This Comment contains four components. First, it provides a brief explanation of cryptocurrency …

Restructuring Undefined Assets: Valuation Of Stablecoins And Their Impact On The Bankruptcy Process, Olivia Woodmansee

American University Business Law Review

Difficulties with defining cryptocurrency have plagued federal agencies and courts since crypto’s creation. With the emergence of “crypto winter” in 2022 that saw many crypto-related ventures fail, bankruptcy courts have been challenged to address numerous novel legal issues surrounding crypto-assets. When looking to the Bankruptcy Code fails to provide answers, courts must look to definitions, agency regulations, and an analysis of cryptocurrency’s position in the market to determine its classification. This can quickly become muddled with the voluminous and seemingly conflicting sources that exist. One such issue emerges when courts attempt to determine how to classify a particular cryptocurrency: is …

A Bona Fide Dispute: Can Bankrupt Debtors Sell Assets Free And Clear Of Federal Civil Forfeiture Claims?, Joseph Peter Gomez

Fordham Journal of Corporate & Financial Law

Auctions are wheeling-dealing extravaganzas in which frenzies of bidders fight over shiny objects. What would happen if the government busted down the doors of the auction house, took the shiny objects, and sold them online? An asset sale through section 363(b) of the Bankruptcy Code provides a court-supervised opportunity to maximize economic value for the bankruptcy estate. To sell estate assets, the debtor must either (1) pay off each creditor holding an interest in the assets or (2) strip the creditor’s interest and attach it to the proceeds of the sale. When the government asserts a civil forfeiture claim against …

Health Of Nations: Preventing A Post-Pandemic Emerging Markets Debt Crisis, Lev E. Breydo

Faculty Publications

Sixty percent of low-income countries are currently at “high-risk” of insolvency, necessitating debt relief, according to the International Monetary Fund. The enormity of the problem cannot be overstated; a prospective sovereign debt crisis and economic collapse threatens hundreds of millions of people around the world.

At the same time, the tools to address these challenges are wholly inadequate. Typically, debt reduction is effectuated through statutory systems; sovereign debt is a critical exception, as there is no bankruptcy court for countries. Historically, this void was filled through a complex architecture based on custom, ‘soft law,’ and contractual mechanisms. However, that construct …

Tinjauan Hukum Penerapan Hak Mendahulu Utang Pajak Dalam Perkara Kepailitan Pt Industries Badja Garuda Berdasarkan Undang-Undang Nomor 37 Tahun 2004 Tentang Kepailitan Dan Penundaan Kewajiban Pembayaran Utang, Siti Fatimah Citra Nurislamiati

"Dharmasisya” Jurnal Program Magister Hukum FHUI

This paper discusses the application of pre-emptive rights over tax debt collection in bankruptcy disputes regulated in Article 41 paragraph (3) of Law Number 37 of 2004 concerning the Bankruptcy and Deferral of Debt Payment Obligations displayed by the Directorate General of Taxes. Tax debts outside the bankruptcy process for compulsory taxes are being filed for bankruptcy by requesting the Commercial Court to return all tax liabilities that would harm the interests of the country. In the event that a taxpayer has been declared bankrupt, the Directorate General of Taxes still has the right to overtake and is privileged, requesting …

Without Reservation: Ensuring Uniform Treatment In Bankruptcy While Keeping In Mind The Interests Of Native American Individuals And Tribes, Connor D. Hicks

Fordham Journal of Corporate & Financial Law

The Bankruptcy Code (“Code”) exists as a mechanism for good faith debtors to discharge debts and seek a “fresh start” in life and finance. 11 U.S.C. § 106(a) ensures that not only are all debtors treated uniformly, but that all creditors, including governmental creditors which may otherwise enjoy immunity from suit, are equally subject to the jurisdiction of Bankruptcy courts and bound to the provisions of the Code.

However, a recent circuit split has demonstrated one niche yet significant instance in which a debtor may not receive the same treatment as their counterparts. While § 106 contains an express waiver …

Steering Loan Modifications Post-Pandemic, Pamela Foohey, Dalié Jiménez, Christopher K. Odinet

Faculty Scholarship

As part of federal and state relief programs created during the COVID-19 pandemic, many American households received pauses on their largest debts, particularly on mortgages and student loans. Others may have come to agreements with their lenders, likewise pausing or altering payment on other debts, such as auto loans and credit cards. This relief allowed households to allocate their savings and income to necessary expenses, like groceries, utilities, and medicine. But forbearance does not equal forgiveness. At the end of the various relief periods and moratoria, people will have to resume paying all their debts, the amounts of which may …

Section 546(E) Redux—The Proper Framework For The Construction Of The Terms Financial Institution And Financial Participant Contained In The Bankruptcy Code After The U.S. Supreme Court’S Holding In Merit, Peter V. Marchetti

Cardozo Law Review

This Article discusses and analyzes the proper framework for the construction of the terms “financial institution” and “financial participant” as defined in Sections 101(22)(A) and 101(22A) of the Bankruptcy Code (the Code), as they work in tandem with Section 546(e) of the Code. In 2018, the U.S. Supreme Court issued its long awaited decision in Merit, which held that the language regarding transfers “made by or to (or for the benefit of) . . . a financial institution” contained in Section 546(e) does not insulate the ultimate transferee of a constructive fraudulent action (a CFTA) simply because the company being …

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 …

A Process For Politics, Anna Gelpern

Georgetown Law Faculty Publications and Other Works

I argue that consistent and public process observance has a distinctly valuable function in sovereign debt restructuring, with no precise equivalent in national insolvency regimes. National regimes reflect the distribution bargains of their enactment, presumptively legitimate and binding. Debtors and creditors allocate insolvency losses in their shadow, with liquidation as a backstop and politics just outside the frame. All else equal, the restructuring process has a harder job with sovereign debt. There is no liquidation backstop and no default distribution scenario. Each crisis resolution episode must allocate losses from scratch among the country’s citizens, foreign and domestic creditors, and other …

Steering Loan Modifications Post-Pandemic, Pamela Foohey, Dalie Jimenez, Christopher K. Odinet

Scholarly Works

As part of federal and state relief programs created during the COVID-19 pandemic, many American households received pauses on their largest debts, particularly on mortgages and student loans. Others may have come to agreements with their lenders, likewise pausing or altering payment on other debts, such as auto loans and credit cards. This relief allowed households to allocate their savings and income to necessary expenses, like groceries, utilities, and medicine. But forbearance does not equal forgiveness. At the end of the various relief periods and moratoria, people will have to resume paying all their debts, the amounts of which may …

Restructuring Support Agreements: An Empirical Analysis, Anthony J. Casey, Frederick Tung, Katherine Waldock

Faculty Scholarship

Restructuring support agreements (RSAs), or contracts that commit bankruptcy parties to supporting a plan of reorganization that will conform to certain requirements, are now a common feature of Chapter 11. Parties utilize these agreements in nearly half of all large cases. While prior literature has debated the normative value of RSAs, we take an empirical approach to look at what provisions the parties include in these agreements and how those provisions have changed over time.

Our analysis looks at all RSAs associated with large bankruptcies through the end of 2020. We characterize the types of firms with RSAs, the parties …

Changing The Student Loan Dischargeability Framework: How The Department Of Education Can Ease The Path For Borrowers In Bankruptcy, Pamela Foohey, Aaron S. Ament, Daniel A. Zibel

Articles

The United States' consumer bankruptcy system supposedly gives "honest but unfortunate" individuals "a new opportunity in life with a clear field for future effort, unhampered by the pressure and discouragement of preexisting debt." Access to bankruptcy's discharge of debt is especially important in the wake of the COVID-19 pandemic, which has resulted in a once-in-a-century economic crisis that is projected to increase bankruptcy filings by people struggling to recover. Those who file bankruptcy will find a system that is already difficult to navigate and has long-recognized racial and gender disparities in access and outcomes.

Student loan borrowers will find a …

Grinding Gears: Meshing Maine Mortgage Foreclosure Law And The Bankruptcy Code, Daniel L. Cummings

Maine Law Review

In Maine interesting and unresolved questions often arise when a mortgagor files for bankruptcy after a judgment of foreclosure has been entered in state court but before a foreclosure sale has occurred. Specifically, what rights does the mortgagor have in the real property? And are the mortgagee's subsequent steps to complete the sale barred by the automatic stay of the Bankruptcy Code (“Code”)? These questions are made more difficult because Maine is a title theory state and because the foreclosure sale occurs after the expiration of the statutory redemption period rather than, as in most states, before it. Because a …

Grinding Gears: Meshing Maine Mortgage Foreclosure Law And The Bankruptcy Code, Daniel L. Cummings

Maine Law Review

In Maine interesting and unresolved questions often arise when a mortgagor files for bankruptcy after a judgment of foreclosure has been entered in state court but before a foreclosure sale has occurred. Specifically, what rights does the mortgagor have in the real property? And are the mortgagee's subsequent steps to complete the sale barred by the automatic stay of the Bankruptcy Code (“Code”)? These questions are made more difficult because Maine is a title theory state and because the foreclosure sale occurs after the expiration of the statutory redemption period rather than, as in most states, before it. Because a …