Bankruptcy Law Commons^™

Article 9'S Bankrupt Proceeds Rule: Amending Bankruptcy Code Section 552 Through The Ucc Proceeds Definition, G. Ray Warner

Faculty Publications

Ten years ago, just as revised Article 9 was becoming effective, I documented how several of the Article 9 revisions had little or no nonbankruptcy function, but were designed primarily to alter bankruptcy law outcomes in favor of secured creditors. I argued that such attempts to amend federal bankruptcy law through the state uniform laws revision process were improper and suggested theories that would limit or avoid the intended bankruptcy law changes. This anniversary symposium provides an excellent opportunity to revisit one of those Article 9 revisions in greater detail and see how successful the drafters' anti-bankruptcy agenda has been.

Religion And Bankruptcy, Keith Sharfman, G. Ray Warner

Faculty Publications

(Excerpt)

From the time of its creation and throughout its evolution, bankruptcy law has affected and been affected by religion. Important aspects of current bankruptcy law, such as the discharge of debt and the exemption of personal property, originated in religious traditions before making their way into secular law. At the same time, religious individuals and institutions are themselves often parties in bankruptcy cases, and the Bankruptcy Code specifically protects religious contributions from avoidance as fraudulent transfers, excludes them from consideration in connection with the dismissal of a bankruptcy case for reasons of abuse, and allows them as a deductible …

A Reappraisal Of Attorneys' Fees In Bankruptcy, Michelle A. Cecil

Faculty Publications

This Article attempts to create a new method for approaching the priority of attorneys’ fees in bankruptcy. It criticizes Lamie for not going far enough toward resolving the attorneys’ fees issue, and proposes a statutory amendment to the Bankruptcy Code that will harmonize the interests of both creditors and debtors who are seeking bankruptcy protection during these difficult economic times.

The Sec In Bankruptcy, G. Ray Warner, Keith Sharfman

Faculty Publications

(Excerpt)

Since its founding, the Securities and Exchange Commission ("SEC") has played an important role as both an advisor and regulator in bankruptcy cases, valuing debtor assets, opining on plans of reorganization, regulating the trading of claims and the disclosure of information, and much else. After a period of relative inactivity following the passage of the Bankruptcy Code (which has a less expansive view of the SEC's role than that of the former Chandler Act whose regime the Code replaced), the SEC's involvement in bankruptcy has intensified in recent years with the ascendancy of equity committees and with the increased …

The Costs Of Bapcpa: Report Of The Pilot Study Of Consumer Bankruptcy Cases, Lois R. Lupica

Faculty Publications

Substantial changes were made to the consumer bankruptcy system with the enactment of BAPCPA. These changes, however, were enacted without data support for, or recognition of how such changes would affect the cost of accessing the bankruptcy system. The Costs of BAPCPA Pilot Study undertook a review of the costs of the consumer bankruptcy system following BAPCPA's enactment, to determine if costs were increased, and if so, whether these costs were passed on to the consumer. The issue of "costs" distills the question of what attorneys are charging consumers to represent them under the new regime. Thus a study of …

Introduction: Adr Meets Bankruptcy, G. Ray Warner

Faculty Publications

(Excerpt)

On October 2, 2009, the American Bankruptcy Institute Law Review, the Hugh L. Carey Center for Dispute Resolution, and the St. John's Institute for Bankruptcy Policy convened respected bankruptcy jurists and dispute resolution scholars to host "ADR Meets Bankruptcy: Cross-Purposes or Cross-Pollination." Bankruptcy is a dispute resolution process unlike other forms of court adjudication, both in the flexibility of the process and in the systemic goals. In many ways, bankruptcy is a form of alternative dispute resolution. Yet there has been little formal engagement between students and practitioners of bankruptcy and students and practitioners of the nominally separate …

We Can Work It Out: Entertaining A Dispute Resolution System Design For Bankruptcy Court, Elayne E. Greenberg

Faculty Publications

On October 2, 2009, dispute resolution scholars and bankruptcy court jurists courageously began the difficult conversation about the feasibility of an expanded dispute resolution system design for bankruptcy court. This commentary distills that conversation through a dispute resolution system design lens. Dispute resolution system design offers a framework for organizations to more effectively manage and resolve recurring conflicts. The design of a dispute resolution system requires clarifying ideas, elucidating values, prioritizing goals, considering options and incorporating that information into a more workable process to respond to conflict. All the while, the stakeholders and dispute resolution designers work together to clarify, …

A Study Of Consumers' Post Discharge Finances: Struggle, Stasis, Or Fresh Start?, Lois R. Lupica, Jay L. Zagorsky Ph.D.

Faculty Publications

The postwar U.S. has experienced an extremely sharp rise in consumer bankruptcies. What happens to these consumers financially after filing for bankruptcy? Do filers catch up with their non-filing peers, stay a constant distance behind or fall further behind over time? This question is investigated empirically using a new set of financial and bankruptcy data obtained from a large national random survey of bankruptcy filers and non-filers. Along some simple financial dimensions, such as car ownership, bankruptcy filers are not disadvantaged compared to non-filers. Along more complex indicators, such as total income and net worth, filers catch up over time …

The Future Of Labor Through The Prism Of Bankruptcy, G. Ray Warner, David L. Gregory

Faculty Publications

(Excerpt)

On Friday, September 28, 2008, St. John's University School of Law was very honored to host "The Future of Labor Through the Prism of Bankruptcy" Symposium. St. John's Institute of Bankruptcy Policy, the American Bankruptcy Institute Law Review, and the Labor Relations and Employment Society at the School of Law co-sponsored this landmark symposium.

Many of the structural changes in contemporary labor-management relationships emanate from the intersections of labor law and bankruptcy law. Many of the nation's major "legacy" industries—including, but not limited to, the unionized auto makers and many airlines—are compelling case studies. Indeed, only a few …

Federalism And Bankruptcy: Deciphering Katz, G. Ray Warner

Faculty Publications

(Excerpt)

A symposium on bankruptcy and state sovereign immunity was held on February 9, 2007 at St. John's University School of Law. Scholarly symposium papers included in this issue of the American Bankruptcy Institute Law Review were prepared by five participants who are experts on issues arising from the intersection of constitutional and bankruptcy law with state sovereign immunity from suits in federal courts. Three of the participating authors, who explore in their articles the theory and history of the jurisprudence of sovereign immunity and the Eleventh Amendment, are outstanding academics who have previously written extensively on this subject—Professor Ralph …

Forward: Symposium On Interdisciplinary Perspectives On Bankruptcy Reform, Michelle A. Cecil

Faculty Publications

In 2003, over 1.6 million consumers filed for bankruptcy protection, surpassing the previous record of 1.5 million bankruptcy filings set just one year earlier. In an effort to reverse the spiraling upward trend of consumer bankruptcies, and to prevent abusive debtors from using the bankruptcy system to avoid paying their debts, in April, 2005, Congress voted overwhelmingly in favor of passing the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA). Widely heralded as the most sweeping bankruptcy reform legislation in over a quarter of a century, BAPCPA was designed in large part to force debtors with the ability …

Bankruptcy Reform: What's Tax Got To Do With It?, Michelle A. Cecil

Faculty Publications

The article takes a two-pronged approach to the issue. First, it argues that all post-petition appreciation should be taxed to the debtor rather than to the debtor's bankruptcy estate because the debtor enjoys the benefits of the asset's appreciation in value and because, from a tax perspective, the results will be identical irrespective of whether the debtor or the bankruptcy estate is taxed on the asset's post-petition appreciation. Second, the article proposes that the gain accruing before the termination of the bankruptcy proceeding be treated as discharge of indebtedness income so that the debtor can defer recognition of the gain …

Debtor Discharge And Creditor Repayment In Chapter 13, Scott F. Norberg, Andrew Velkey

Faculty Publications

Consumer bankruptcy filings hit another record high in 1998, with nearly 1.4 million consumers filing for bankruptcy relief. This trend sparked a debate in Congress about means-testing chapter 7 bankruptcy filings. Proponents of reform argued that it would curtail fraud and abuse. Opponents believed that consumer debt was swamping income growth, and that the deregulation of the consumer credit market had led to overgenerous lending and hence to more bankruptcies. This is an empirical study of whether filers for chapter 13 bankruptcy cases are abusing the system, or whether debtors are truly being swamped by debt in excess of their …

Legislative Messaging And Bankruptcy Law, Lois R. Lupica, Karen Gross, Kathryn R. Heidt

Faculty Publications

This Essay grew out of many three-way conversations and multiple collaborative drafts. We began this conversation at the academic conference in 2003 celebrating the Bankruptcy Code’s upcoming 25th Anniversary. Sadly, we did not have the opportunity to finish either the conversations or to finalize this Essay before Kate Heidt’s untimely death in May 2005. Completed in her absence, this Essay is dedicated to the memory of our close friend and colleague, Professor Kathryn R. Heidt.

Bankruptcy And State Collections: The Case Of The Missing Garnishments, Richard M. Hynes

Faculty Publications

Recent bankruptcy reforms were spurred in part by a bankruptcy filing rate that has more than doubled in the last ten years and that has risen by approximately six hundred percent over the last generation. Some attribute this surge in filings to Americans' greater willingness to avoid debts by declaring bankruptcy. Most academics, however, argue that more Americans are forced into bankruptcy by crushing debt burdens and aggressive collections techniques. Surprisingly, the literature has largely ignored data on the use of these collections techniques. This Article examines the use of one of the most important collections tools, garnishment, in two …

2005: A Consumer Bankruptcy Odyssey, Gary Neustadter

Faculty Publications

Congress has concluded that the voyage of consumer bankruptcy in the United States is off course and that some of its crew - consumer bankruptcy attorneys and bankruptcy judges - no longer can be completely trusted at the helm. Following years of drama reminiscent of the 1914 silent film serial "Perils of Protection Act of 2005 ("the Act"). Save perhaps the 1938 introduction of Chapter XIII, the correction presents the most far reaching changes in consumer bankruptcy law since the adoption of the Bankruptcy Act of 1898. These changes come little more than a decade after Congress established a National …

Credit Markets, Exemptions, And Households With Nothing To Exempt, Richard M. Hynes

Faculty Publications

American bankruptcy law has offered a "fresh start" in every state for over one hundred years. As a result, econometric studies of consumer bankruptcy often focus on one of the few aspects of the law that has varied significantly across time and across states: exemptions. Professors Gropp, Scholz and White published the first article to test the effect of exemptions on credit markets. Consistent with theory, they found that residents of states with larger exemptions pay higher interest rates than those in states with lower exemptions andface an increased probability that they will be denied credit. These effects were most …

Caught In The Trap: Pricing Racial Housing Preferences, A. Mechele Dickerson

Faculty Publications

No abstract provided.

Why Annie Gets To Keep Her Gun: An Analysis Of Firearm Exemptions In Bankruptcy Proceedings, Marcia A. Yablon-Zug

Faculty Publications

No abstract provided.

The Impact Of Revised Article 9, Lois R. Lupica

Faculty Publications

Under Revised Article 9, secured creditors are granted greater rights than they had under former Article 9. We now have a secured credit system whereby secured creditors can more easily encumber a greater number of types of assets and can securitize more types of assets with greater certainty. These revisions were justified on the grounds of efficiency, although the impact of these revisions was not empirically proven. This article sets forth a research protocol for the study of Revised Article 9's impact on the credit markets.

Garnishment Restrictions And The Involuntary Chapter 11: Rethinking Kokoszka In A Means Test World, G. Ray Warner

Faculty Publications

(Excerpt)

Supreme Court opinions often take on a life of their own, evolving into authority for a general proposition divorced from the factual and legal environments that gave them birth. The emerged proposition assumes a talismanic quality and becomes accepted as the meaning of the case. The proposition is extended and applied as a principle, without revisiting the opinion from which it sprang. A dramatic change in the background legal regime calls for a re-evaluation of such accepted principles and a return to their origins to determine whether, and to what extent, the emerged proposition still has validity.

An example …

Tax Consequences Of Post-Petition Income As Property Of The Estate In An Individual Debtor Chapter 11 Case And Tax Disclosure In Chapter 11, Jack F. Williams, Jacob L. Todres

Faculty Publications

(Excerpt)

On April 20, 2005, the President signed the Bankruptcy Abuse Prevention and Consumer Protection Act of 20051 ("2005 Act" or "BAPCPA"). Although most of the controversy surrounding the 2005 Act centered on many of the consumer provisions, the 2005 Act also included substantial changes to business bankruptcies and the most substantial modifications of bankruptcy tax law since 1980. Generally, most provisions in the 2005 Act are effective for cases commenced on or after October 17, 2005, unless otherwise noted. However, there are at least a half dozen other dates noted, including on or after the date of enactment (April …

Judicial Valuation Behavior: Some Evidence From Bankruptcy, Keith Sharfman

Faculty Publications

This Article presents an empirical study of judicial valuation in the bankruptcy context, focusing on twenty-four valuation disputes in which a bankruptcy judge reached a valuation outcome between the values contended for by the parties. Two main findings emerged from the cases studied: (1) bankruptcy judges on average allocated 65.2% of the value in controversy to debtors and 34.8% to secured creditors; and (2) bankruptcy judges were more than three times as likely to allocate most of the value in controversy to debtors as they were to secured creditors. These results lend empirical support to the behaviorist intuition that loss …

Why (Consumer) Bankruptcy?, Richard M. Hynes

Faculty Publications

No abstract provided.

Race Matters In Bankruptcy, A. Mechele Dickerson

Faculty Publications

No abstract provided.

Bankruptcy And Mortgage Lending: The Homeowner Dilemma, A. Mechele Dickerson

Faculty Publications

No abstract provided.

A Politically Viable Approach To Sovereign Debt Restructuring, A. Mechele Dickerson

Faculty Publications

The failure to enact a statutory system to restructure sovereign debt suggests that the international community is still unwilling to adopt a unified global response to insolvency issues. Since nations refused to enact uniform legislation to facilitate more orderly business insolvencies within a sovereign, it is not surprising that recent attempts to create uniform legislation that addresses the insolvency of sovereigns themselves have been unsuccessful. While a comprehensive statutory approach can predictably and efficiently restructure all of a sovereign's debts, the failed experience with uniform cross-border insolvency legislation suggests that sovereigns will not accept an inflexible statutory scheme that contains …

Abandonments In Bankruptcy: Unifying Competing Tax And Bankruptcy Policies, Michelle A. Cecil

Faculty Publications

This Article attempts to resolve one such issue: the tax consequences of property abandonments by the bankruptcy trustee.

The Many Faces Of Chapter 11: A Reply To Professor Baird, A. Mechele Dickerson

Faculty Publications

No abstract provided.

The Bankruptcy Code At Twenty-Five And The Next Generation Of Lawmaking, Melissa B. Jacoby

Faculty Publications

No abstract provided.