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Bankruptcy Law Commons

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Brooklyn Journal of Corporate, Financial & Commercial Law

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Articles 31 - 41 of 41

Full-Text Articles in Bankruptcy Law

Private Benefits Without Control? Modern Chapter 11 And The Market For Corporate Control, Oscar Couwenberg, Stephen J. Lubben Oct 2018

Private Benefits Without Control? Modern Chapter 11 And The Market For Corporate Control, Oscar Couwenberg, Stephen J. Lubben

Brooklyn Journal of Corporate, Financial & Commercial Law

Outside of bankruptcy, a board of directors’ decision to take control rights away from existing shareholders and grant them to another is subject to heightened fiduciary duties. As the sale of control represents a kind of end game, shareholders have one last chance to realize the full value for their investment. In such a context, their interests warrant special protection. A similar sale of control can happen in a chapter 11 procedure when a bankruptcy plan revamps the capital structure of the firm. In such a restructuring of the firm, control rights can be newly created, redefined and redistributed to …


The Devious Debtor: 11 U.S.C. § 523(A)(2)(B) And The Need For A More Equitable Outcome, Torie Levine Oct 2018

The Devious Debtor: 11 U.S.C. § 523(A)(2)(B) And The Need For A More Equitable Outcome, Torie Levine

Brooklyn Journal of Corporate, Financial & Commercial Law

Section 523(a)(2)(A) of the Bankruptcy Code prohibits debtors from discharging debts for money, property, services, or credit obtained by false pretenses, a false representation, or actual fraud other than a statement respecting the debtor’s financial condition. Under § 523(a)(2)(B), if those debts are obtained by a statement respecting the debtor’s financial condition, then the statement must be in writing for the debt to be discharged. A conflict among the circuit courts arose as to whether a statement about a single asset can be a statement respecting the debtor’s financial condition. The majority of the courts applied a narrow interpretation to …


The Husky Case: Fraud, Bankruptcy, And Veil Piercing, Harvey Gelb Jun 2018

The Husky Case: Fraud, Bankruptcy, And Veil Piercing, Harvey Gelb

Brooklyn Journal of Corporate, Financial & Commercial Law

A recent Supreme Court decision, Husky International Electronics, Inc. v. Ritz, explores the meaning of the word “fraud” under a federal bankruptcy statutory section. That section uses the term “actual fraud,” and bears upon the question of whether a particular debt should be denied a discharge. The Court’s approach in defining fraud affords guidance to the question of defining fraud under other statutes. The Husky case also raised a veil piercing issue to be dealt with on remand. That issue involved the application of Texas statutory law precluding veil piercing in cases brought by contract creditors unless they were victims …


Sovereign Debt Restructuring And English Governing Law, Steven L. Schwarcz Dec 2017

Sovereign Debt Restructuring And English Governing Law, Steven L. Schwarcz

Brooklyn Journal of Corporate, Financial & Commercial Law

The problem of sovereign indebtedness is becoming a worldwide crisis because nations, unlike individuals and corporations, lack access to bankruptcy laws to restructure unsustainable debt. Decades of international efforts to solve this problem through contracting and attempted treaty-making have failed to provide an adequate debt-restructuring framework. A significant amount of outstanding sovereign debt is governed, however, by English law. This Article argues that the U.K. Parliament has the extraordinary power to help solve the problem of unsustainable country debt by changing English law to facilitate fair and consensual debt restructuring. This Article also proposes modifications to English law that Parliament …


Promesa And The Bankruptcy Clause: A Reminder About Uniformity, Stephen J. Lubben Dec 2017

Promesa And The Bankruptcy Clause: A Reminder About Uniformity, Stephen J. Lubben

Brooklyn Journal of Corporate, Financial & Commercial Law

The Bankruptcy Clause—Article I, Section 8, Clause 4—provides that “The Congress shall have power . . . [t]o establish . . . uniform Laws on the subject of Bankruptcies throughout the United States . . . .”[1] But Congress has just enacted a bankruptcy law that applies to a single American territory. In early May 2017, Puerto Rico and one affiliated entity filed a petition under this new law. In late May, the Employees Retirement System commenced a case, along with the Puerto Rico Highway and Transportation Authority. Other Puerto Rican sub-entities are expected to follow. I use this short …


Decision-Making And The Shaky Property Foundations Of Municipal Bankruptcy Law, Juliet M. Moringiello Dec 2017

Decision-Making And The Shaky Property Foundations Of Municipal Bankruptcy Law, Juliet M. Moringiello

Brooklyn Journal of Corporate, Financial & Commercial Law

Municipal bankruptcies are unpredictable. There are several reasons for this statement— municipal bankruptcies are rare, involvement of the state itself in the process varies according to the governing state law, and chapter 9, the Bankruptcy Code chapter governing the municipal bankruptcy process, has many gaps. Congress constructed the modern chapter 9 on a foundation of corporate bankruptcy law, a foundation whose roots—corporate finance—are significantly different from the rules governing municipal finance. In this Article, Professor Moringiello aims a spotlight on the property roots of private bankruptcy law and compares them to the promissory and statutory roots of municipal finance law …


Towards A Jurisprudence Of Public Law Bankruptcy Judging, Edward J. Janger Dec 2017

Towards A Jurisprudence Of Public Law Bankruptcy Judging, Edward J. Janger

Brooklyn Journal of Corporate, Financial & Commercial Law

In this essay Professor Janger considers the role of bankruptcy judges in Chapter 9 cases in light of the scholarly literature on public law judging. He explores the extent to which bankruptcy judges engaged in the fiscal restructuring of a municipality use tools, and face constraints, similar to those utilized by federal district court judges in structural reform cases, where constitutional norms are at issue.


Understanding Wellness International Network, Ltd. V. Sharif: The Problems With Allowing Parties To Impliedly Consent To Bankruptcy Court Adjudication Of Stern Claims, Elizabeth Jackson Dec 2016

Understanding Wellness International Network, Ltd. V. Sharif: The Problems With Allowing Parties To Impliedly Consent To Bankruptcy Court Adjudication Of Stern Claims, Elizabeth Jackson

Brooklyn Journal of Corporate, Financial & Commercial Law

The 2011 Supreme Court case Stern v. Marshall defined which claims bankruptcy courts had the authority to adjudicate, but it’s complicated holding left lower courts perplexed. Specifically, the Stern decision created “Stern claims”—claims that bankruptcy courts have the statutory, but not the constitutional, authority to adjudicate. Subsequent cases, such as Executive Benefits Insurance Agency v. Arkison and Wellness International Network, Ltd. v. Sharif, have grappled with whether Stern claims should be treated as “core” claims, which bankruptcy courts can enter final judgments on, or “non-core” claims, which bankruptcy courts can only enter final judgments on if the litigating parties consent. …


Bankruptcy: Where Attorneys Can Lose Big Even If They Win Big, Stanislav Veyber Dec 2016

Bankruptcy: Where Attorneys Can Lose Big Even If They Win Big, Stanislav Veyber

Brooklyn Journal of Corporate, Financial & Commercial Law

Historically, bankruptcy attorneys received the short end of the stick and were paid less for their services than attorneys in other fields of law. With the Bankruptcy Reform Act of 1978, Congress attempted to reduce the discrepancy in compensation. However, after the Supreme Court’s decision in Baker Botts v. ASARCO; L.L.C., the playing field remains unequal for bankruptcy attorneys. Following this decision, if a debtor disputes their attorney’s fee application, attorneys are at a disadvantage and cannot recover fees for defending their fee application. As a result, bankruptcy attorneys take an effective pay cut if they are faced with a …


Regulatory Incentive Realignment And The Eu Legal Framework Of Bank Resolution, Andromachi Georgosouli Jan 2016

Regulatory Incentive Realignment And The Eu Legal Framework Of Bank Resolution, Andromachi Georgosouli

Brooklyn Journal of Corporate, Financial & Commercial Law

Risks associated with incentive misalignment are liable to seriously jeopardize the effectiveness of bank resolution, when not properly contained. This Article considers the management of misaligned incentives between regulators that are found in a vertical relationship of public governance. Using the EU legal framework of bank resolution as its case study, this Article explores the effectiveness of the quasi-enforcement powers of the Single Resolution Board (SRB) and, where relevant, of the European Banking Authority (EBA) as an incentive realignment legal technique. Two principal difficulties are identified: on the one hand, the problematic interinstitutional dynamic of the SRB and the EBA …


Liquidity, Systemic Risk, And The Bankruptcy Treatment Of Financial Contracts, Rizwaan J. Mokal Jan 2015

Liquidity, Systemic Risk, And The Bankruptcy Treatment Of Financial Contracts, Rizwaan J. Mokal

Brooklyn Journal of Corporate, Financial & Commercial Law

No abstract provided.