Bankruptcy Law Commons^™

An Empirical Investigation Of Liquidation Choices Of Failed High Tech Firms, Ronald J. Mann

Faculty Scholarship

Perhaps it is merely a reflection of my interests, but to my mind, empirical research requires a certain risk-preferent boldness. I like projects that explore how and why particular businesses make important decisions. After I identify a topic, I typically try to gather as much qualitative and quantitative information about it as I can, with the expectation that when I have learned a great deal about the topic something interesting will emerge that relates in some important way to an ongoing academic debate. Those projects usually do not begin with a specific hypothesis to prove or disprove-often either answer will …

Muddy Property: Generating And Protecting Information Privacy Norms In Bankruptcy, Edward J. Janger

Faculty Scholarship

No abstract provided.

Muddy Property: Generating And Protecting Information Privacy Norms In Bankruptcy, Edward J. Janger

Faculty Scholarship

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.

After Orange County: Reforming California Municipal Bankruptcy Law, Frederick Tung

Faculty Scholarship

Because of federal constitutional concerns, a municipal entity may resort to federal bankruptcy protection only with the authorization of its state. Federal law requires that a municipality be "specifically authorized" under state law to file for bankruptcy protection. Existing California law provides fairly broad authorization for its municipalities, but the statute is in need of both technical and substantive revision. After discussing constitutional concerns and surveying other states' approaches to municipal bankruptcy authorization, Professor Tung recommends a system of discretionary access, in which the governor holds discretionary power to approve, disapprove, or condition a municipality's access to bankruptcy.

Passports, Private Choice, And Private Interests: Regulatory Competition And Cooperation In Corporate, Securities, And Bankruptcy Law, Frederick Tung

Faculty Scholarship

This paper discusses international regulatory competition in the related areas of corporate, securities, and bankruptcy law, contrasting two different forms that regulatory competition may take. The first is private choice, or "direct competition." In this arrangement, firms are free to elect the regulatory regime that will govern their affairs, regardless of the location of a firm's assets, personnel, registered office, or transactions. The paradigmatic example is corporate charter competition among US states. The second form of competition is the "regulatory passport" arrangement, which has also been variously described as "mutual recognition" and "reciprocity." In this scenario, nations agree to recognize …

Muddy Rules For Securitization Transactions, Edward J. Janger

Faculty Scholarship

No abstract provided.

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 …

Crystals And Mud In Bankruptcy Law: Judicial Competence And Statutory Design, Edward J. Janger

Faculty Scholarship

No abstract provided.

Is International Bankruptcy Possible?, Frederick Tung

Faculty Scholarship

Although international business firms proliferate, there is no international bankruptcy system. Instead, bankruptcy law remains a matter for individual states. The failure of a multinational firm therefore raises difficult questions of conflict and cooperation among national bankruptcy laws. In the discourse over the appropriate design for an international bankruptcy system, universalism has long held sway as the dominant idea, embraced nearly universally by bankruptcy scholars. Universalism offers a simple and elegant blueprint for international bankruptcy. Under universalism, the bankruptcy regime of the debtor firm's home country would govern worldwide, enjoying global reach to treat all of the debtor's assets and …

Taxes, Bankruptcy, And The Lazarus Problem, Alan L. Feld

Faculty Scholarship

[1] The Ninth Circuit recently barred the IRS from its day in court in a personal bankruptcy proceeding. ¹ The issue in the case concerned the effect, in a chapter 13 bankruptcy proceeding, of a dismissal order followed later by an order reinstating the case. The Ninth Circuit counted the number of days between the dismissal and the reinstatement against the government and ordered the IRS proof of claim dismissed as untimely. As a result, the tax owing became subject to discharge in the bankruptcy without taxpayer payment.

[2] The result defeats the intent of the statute and creates waste …

Licensing Intellectual Property And Technology From The Financially-Troubled Or Startup Company: Prebankruptcy Strategies To Minimize The Risk In A Licensee's Intellectual Property And Technology Investment, Richard M. Cieri, Michelle M. Harner

Faculty Scholarship

No abstract provided.

The Locus Of Lawmaking: Uniform State Law, Federal Law, And Bankruptcy Reform, Edward J. Janger

Faculty Scholarship

No abstract provided.

The Future Claims Representative In Mass Tort Bankruptcy: A Preliminary Inquiry, Frederick Tung

Faculty Scholarship

Mass torts have becomemoved center stage in the courts, the academy, and the popular press. The plight of mass tort victims—asbestos victims, Dalkon shield users, breast implant recipients, among others—has become standard fare in the media., and cCourts and commentators have struggled for several decades attempting to craft just and workable solutionsresolutions of mass tort liabilities. The challenge is to save the business, restructuring its debts, while providing fair treatment to future claimants and achieving a final resolution of their rights against the business.

The Administrative Relationship Between The District And Bankruptcy Courts, William W. Schwarzer, Neil Mcgaraghan

Faculty Scholarship

No abstract provided.

The Locus Of Lawmaking: Uniform State Law, Federal Law, And Bankruptcy Reform, Edward J. Janger

Faculty Scholarship

No abstract provided.

Limited Liability And Creditors' Rights: The Limits Of Risk Shifting To Creditors, Frederick Tung

Faculty Scholarship

In this Symposium, we were asked to identify and articulate the nature of our passion for teaching corporate law. My passion-a bit odd in this context, perhaps-is bankruptcy. In addition to teaching the basic Corporations course, I also teach Corporate Reorganization and Bankruptcy, and my research has focused primarily on corporate reorganization issues. As I say, my particular passion may seem out of place in the context of this Symposium. The corporation is an engine for maximizing wealth. Yet we bankruptcy types obsess about financial ruin. We pray for the next recession. We sell short. Our chips sit on the …

The Wasted Sacrifice Of Lessors' Lost Profit Claims In Bankruptcy, Marie T. Reilly

Faculty Scholarship

Bankruptcy Code section 502(b)(6) sets the maximum allowable amount of a real property lessor's claim for damages arising for breach of lease in a tenant's bankruptcy case. To the extent a lessor's damages claim under nonbankruptcy law exceeds the maximum amount, it is disallowed. The implicit premise for such disallowance is that real property lessors' damages claims are less worthy of respect in bankruptcy than other claims for damages against the debtor. Real property leases are legally distinct from leases of personal property or other contractual relationships that allocate property rights. But, it does not obviously follow from the distinction …

Introduction To The Articles Presented By Three Rising Stars In Bankruptcy Scholarship, Samuel Bufford

Faculty Scholarship

Bankruptcy law is one of the fundamental legal structures necessary to the functioning of a market economy. In the common law tradition of the United States and England, bankruptcy law dates back to 1542. Bankruptcy law's origins are even more ancient, with roots extending back to at least the Hammaurabi Code and the Law of Moses. In the transition to market economies and Western-style legal systems in Central and Eastern Europe, the development of a viable bankruptcy law is one of the first priorities. This, the United States bankruptcy law that forms the background for this symposium is central to …

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 …

Optimal Timing And Legal Decisionmaking: The Case Of The Liquidation Decision In Bankruptcy, Douglas G. Baird, Edward R. Morrison

Faculty Scholarship

Until the firm is sold or a plan of reorganization is confirmed, Chapter 11 entrusts a judge with the decision of whether to keep a firm as a going concern or to shut it down. The judge revisits this liquidation decision multiple times. The key is to make the correct decision at the optimal time. This paper models this decision as the exercise of a real option and shows that it depends critically on particular types of information about the firm and its industry. Liquidations take place too soon if we merely compare the liquidation value of the assets with …

Brandeis, Progressivism, And Commercial Law: Rethinking Benedict V. Ratner, Edward J. Janger

Faculty Scholarship

No abstract provided.

Corporate Debt Restructurings In Mexico: For Foreign Creditors, Insolvency Law Is Only Half The Story, Kimberly D. Krawiec

Faculty Scholarship

No abstract provided.

Strategies For Preserving The Bankruptcy Trustee's Avoidance Power Against States After Seminole Tribe, Edward J. Janger

Faculty Scholarship

No abstract provided.

Romanian Bankruptcy Law: A Central European Example, Samuel Bufford

Faculty Scholarship

Romania now has one of the best-drafted bankruptcy laws in Central and Eastern Europe. The new Romanian bankruptcy law went into effect on August 26, 1995 and replaced the previous bankruptcy provisions in §695-987 of the Romanian Commercial Code, which was translated from the Italian Commercial Code of 1884 and enacted in 1887. While the commercial code fell into disuse during the Communist era, it was never repealed. After the Romanian revolution and the demise of Nicolae Ceauşescu at the end of 1989, the commercial code as well as the civil code remained good law and needed only to be …

Strategies For Preserving The Bankruptcy Trustee's Avoidance Power Against States After Seminole Tribe, Edward J. Janger

Faculty Scholarship

No abstract provided.

The Latent Efficiency Of Fraudulent Transfer Law, Marie T. Reilly

Faculty Scholarship

A creditor holding a claim against a debtor typically holds the right, subject to the debtor's default, to obtain a judgment against the debtor, liquidate the debtor's assets, and apply the proceeds against his claim. If the debtor's assets are insufficient to satisfy the creditor's claim, the creditor is usually, but not always, out of luck. Under limited circumstances, a creditor can reach property the debtor transferred to a third party and apply the value of such property to satisfy his claim. The creditor can undo the transfer and obtain the property or its value from the transferee as though …

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 …

Strategy And Force In The Liquidation Of Secured Debt, Ronald J. Mann

Faculty Scholarship

The question of why parties use secured debt is one of the most fundamental questions in commercial finance. The commonplace answer focuses on force: A grant of collateral to a lender enhances the lender's ability to collect its debt by enhancing the lender's ability to take possession of the collateral by force and sell it to satisfy the debt. That perspective draws considerable support from the design of the major legal institutions that support secured debt: Article 9 of the Uniform Commercial Code and the less uniform state laws regarding real estate mortgages.

Both of those institutions are designed solely …

Protective Orders In The Bankruptcy Court: The Congressional Mandate Of Bankruptcy Code Section 107 And Its Constitutional Implications, Michelle M. Harner, William T. Bodoh

Faculty Scholarship

No abstract provided.