Bankruptcy Law Commons^™

Deemed Acceptance, Not Deemed Consent: Nonvoting Stakeholders And A Uniform Conspicuousness Standard For Opt-Out Third-Party Releases, Zach Cavagnaro

Student Scholarship

After Harrington v. Purdue Pharma, the fight over third-party opt-out releases has shifted from whether consent is necessary to what consent means. The Supreme Court held that the Bankruptcy Code does not authorize non-consensual nondebtor releases outside 11 U.S.C § 524(g), and—critically—left out what exactly counts as consent. The fight over consent is expected to command a lot of litigation, so a simple, uniform conspicuousness standard for nonvoting stakeholders’ opt-out releases can help alleviate litigation costs and focus on the definition of consent. This Comment argues that courts should evaluate consent through a unified, contract-law-grounded conspicuousness standard calibrated to the …

The Treatment Of Digital Assets In Insolvency, Nydia Remolina Leon, Aurelio Gurrea-Martinez, Daniel Liu

Research Collection Yong Pung How School Of Law

This article provides a comprehensive analysis of the treatment of digital assets in insolvency. Given that cryptoassets can be the subject of various transactions—including purchase, sale, custody, and lending—understanding their nature and implications in insolvency is relevant for any firm, not just cryptoexchanges. The article begins by offering a general overview of the world of cryptoassets. It then examines the nature of cryptoassets from accounting, financial, and legal perspectives. While much of the literature on insolvency and cryptoassets has primarily focused on the analysis of whether cryptocurrencies constitute property of the estate, this article explores additional issues, such as the …

The Hypocrisy Of The Wizards—A Proposal To Correct Incentives In Higher Education Loan Financing, Caden Benedict

School of Public Policy Capstones

This paper explores the origins of the student loan debt crisis and proposes tying university incentives to graduates' repayment plans and disclosing median earnings for degrees before students apply. Specifically, while there are numerous factors explaining why the price of education has increased dramatically since the 1970s, this paper proposes solutions that will specifically target university moral hazards by requiring universities fund: (1) the current subsidies to federal student loan repayments under income-driven plans as the House of Representatives intended before the Senate removed "risk-sharing," and (2) bankruptcy law discharge amounts. Moreover, requiring universities to disclose the median earnings of …

What Start-Up Lawyers Should Know About Bankruptcy, Christopher D. Hampson

UF Law Faculty Publications

Bankruptcy has long been regarded as a gloomy area of law, one that fits uneasily with the heady optimism usually associated with start-ups. At the same time, start-up lawyers need to understand how downside scenarios will play out, both inside and outside bankruptcy court, in order to advise their clients appropriately. That is especially true for social enterprises – where the decisions throughout a company’s life affect its ability to stick to its mission during times of financial distress. In a forthcoming book chapter, I map out the various elements that start-up lawyers need to consider.

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 …

The Bankruptcy Judge And The Generalist Tradition, Alexander Gouzoules

Faculty Publications

The prevailing academic consensus is that bankruptcy judges are specialists presiding over specialized courts. This Article contends that this description is incomplete and, in some respects, inaccurate. Drawing on scholarly models of judicial specialization and historical surveys of the field, this Article contends that bankruptcy judges reflect a hybrid design choice: procedural specialization combined with substantive generalism. This model delivers many of the observed benefits of judicial specialization (including efficiency and technical competence) while preserving the cross-pollination of ideas and other benefits associated with the generalist tradition of American judging.

This Article also reflects on contemporary developments—most notably the rise …

Does Bidder Complexity Affect Market Reactions To M&A Decisions?, Rajib Chowdhury, John A. Doukas

Finance Faculty Publications

We examine whether and how bidder complexity influences investor reactions to merger and acquisition (M&A) announcements. Using an established measure of complexity, we find a significant positive relationship between acquiring firm complexity and cumulative abnormal returns (CAR). This suggests that investors perceive more complex firms as capable and value-enhancing participants in M&A activities. The association is particularly strong for bidders with high operating risk, greater R&D intensity, and larger firm size. We also find that complex bidders tend to offer higher takeover premiums. Overall, our study contributes to the literature by demonstrating that bidder complexity is an important determinant of …

Bankruptcy Preemption Of Malicious Prosecution Actions: Cogan V. Trabucco, Alyssa Knecht

Cardozo Law Review de•novo

This Note examines jurisdiction over state torts that arise during a bankruptcy proceeding. Recently, the Ninth Circuit permitted a collateral attack on a state court judgment regarding malicious prosecution in Cogan v. Trabucco. The Ninth Circuit held that federal courts have exclusive jurisdiction over malicious prosecution actions and that abuse of process state torts are completely preempted by federal law. This decision left the debtor without any redress and divested state courts of jurisdiction over cases under its own tort law. This Note argues the Ninth Circuit, in Cogan, erroneously made “related to” jurisdiction exclusive and incorrectly held that federal …

Specialization And The Permanence Of Federal Bankruptcy Law, Rafael I. Pardo

Scholarship@WashULaw

Traditional historical accounts posit that federal bankruptcy specialization in the United States first developed under the system established by the Bankruptcy Act of 1898. That view assumes that the structural and temporal conditions necessary to foster specialization did not exist under the nation’s earlier federal bankruptcy systems—those created by the Bankruptcy Acts of 1800, 1841, and 1867. This Article theorizes that federal bankruptcy specialization very likely occurred under the pre-1898 systems and marshals evidence to that effect, primarily focusing on the Bankruptcy Act of 1841 (the 1841 Act). That statute marked a critical turning point in federal bankruptcy law, shifting …

Whose Month Is It? Stub Rent Under §§ 365(D)(3) And 503(B)(1), Shukhrat Muratov

Bankruptcy Research Library

(Excerpt)

Courts are divided on whether landlords are entitled to immediate payment of this rent obligation under 11 U.S.C. § 365(d)(3) or must seek recovery through administrative expense claims under 11 U.S.C. § 503(b)(1). The majority of circuit courts, including the Third, Sixth, and Seventh Circuits, follow the billing date approach, holding that rent obligations arise when due under the lease, meaning that rent due on the first of the month arises entirely pre-petition if the bankruptcy filing occurs later in the month. Under this approach, landlords are not entitled to prompt payment of stub rent under § 365(d)(3). They …

Dischargeability Of Student Loan Debt In Bankruptcy Cases, Dean Van Noy

Bankruptcy Research Library

(Excerpt)

Student loan debt represents one of the largest categories of consumer debt in the United States. Currently, statistics show that there is $1.8 trillion in outstanding student-loan debt owed by approximately 42.5 – 45.8 million debtors. This statistic can be attributed to the fact that the cost of higher education has increased significantly. Department of Education data shows that average tuition prices have more than doubled at colleges and universities around the country over the last three decades. As a direct consequence of this continuously increasing cost of tuition, many debtors have struggled to pay back their student-loan debt, …

Corporate Structuring, Ip Holding Companies & Bankruptcy, Ava Sheftick

Bankruptcy Research Library

(Excerpt)

There are various ways in which the founders of a company may structure their business. While a key focus of corporate planning is how to maximize revenue and operate efficiently, minimizing the risk associated with financial distress is an equally important consideration. A corporation’s structure is made during a time of stability, but it must account for the ultimate financial distress—bankruptcy. Asset allocation is a critical step in the planning stage of a business enterprise, especially when considering creditors the company is going to take on. Companies’ intellectual property ("IP") may be highly valuable assets that must be considered …

Receiverships V. Bankruptcy As A Secured Creditor, Benjamin Nicholas

Bankruptcy Research Library

(Excerpt)

Since the COVID-19 pandemic of 2020, the Commercial Real Estate (CRE) Market, which is the fourth-largest asset market in the US, has faced high uncertainty.  Many workers were either unemployed or working from home, and many consumers were forced to shop online instead of visiting traditional brick-and-mortar storefronts. These market shifts significantly impacted Commercial Real Estate Companies (CRECs), as high vacancy rates were observed in corporate offices, and many retailers struggled to attract customers to their stores.

Although five years have passed since the pandemic, many CRECs are still struggling to recover from COVID-19’s lasting impact on the economy. …

Batting Around Section 363: Sports Franchise Sales, League Consent, And The Boundaries Of Bankruptcy, Katelyn Pantano

Bankruptcy Research Library

(Excerpt)

The question presented is whether a bankruptcy court may authorize the sale of a professional sports franchise without league consent, and whether bankruptcy courts should permit such sales as a matter of policy.

The client, The New York Bets (“the Bets”), is a professional baseball franchise experiencing financial distress and is considering filing for Chapter 11 bankruptcy to facilitate a sale to a new owner. The MLB’s governing documents require league approval, a three-quarters vote of all club owners, for any ownership transfer. The client is now considering Chapter 11 bankruptcy to avoid this approval process and instead have …

Treatment Of Assignment Of Rents In Bankruptcy Under New York Law, James Agoglia

Bankruptcy Research Library

(Excerpt)

Assignments of rents are a common feature of commercial real estate financing in New York. In connection with a mortgage or other secured loan, a borrower that owns income-producing property typically grants the lender an assignment of rents as additional security, entitling the lender to rental income generated by leases at the property upon the borrower’s default. These assignments are intended to protect the lender’s interest by providing an alternative source of repayment and by limiting the borrower’s ability to divert rental income during periods of financial distress.

Disputes concerning assignments of rents often arise when a borrower defaults …

Priority Of Warn Act Claims In Bankruptcy And Rights Of Independent Contractors, Colin Hanlon

Bankruptcy Research Library

(Excerpt)

The Bankruptcy Code establishes a tiered priority system for the payment of unsecured claims, governing the order of distribution when there are insufficient assets to pay all creditors in full. The priority system is fundamental to the operation of the Bankruptcy Code because in most bankruptcy cases, the debtor lacks adequate assets to fully pay all creditors. The Bankruptcy Code grants fourth-level priority up to $17,150 per individual for “wages, salaries, or commissions, including vacation, severance, and sick leave pay earned by an individual.” To receive priority treatment, wages must be earned within 180 days before either the petition …

Fraudulent Transfers And Sovereign Immunity, David G. Carlson

Articles

The article argues that the Supreme Court's decision in United States v. Miller was wrongly decided because it failed to recognize that sovereign immunity is waivable and does not protect the government when it trespasses upon preexisting property rights. The analysis contends that fraudulent transfer claims are quasi in rem actions, meaning the sovereign is subject to the incidental procedures of bankruptcy once enmeshed in such proceedings.

What Lpe And The Christian Bible Have In Common, Christopher D. Hampson, Alvin Velazquez

UF Law Faculty Publications

No abstract provided.

Where Singapore Meets Asean: Shaping Insolvency Reform For Micro And Small Enterprises, Lovein Leying Sui

Singapore Law Journal (Lexicon)

Given the economic dependence on micro and small enterprises (MSEs) in the ASEAN region, the MSE insolvency regime is of paramount regional importance. Evidence indicates that the ASEAN region has prioritised the improvement of such a regime, especially after the financial instability following the COVID-19 pandemic. This paper explores how trends in ASEAN MSE insolvency can inform Singapore’s insolvency reforms to improve MSE access and efficiency, while also considering broader implications for the region.

The Defamation-To-Bankruptcy Pipeline In The United States And Around The World, Christopher D. Hampson

UF Law Faculty Publications

It has never been easier to ‘go viral’. With nothing more than a microphone, a smartphone, and some computer software, an influencer in today’s media landscape can reach millions. But that ease comes with risk: defamation lawsuits are on the rise, sending content creators to bankruptcy courts with judgments that far exceed everything they own. Last year, I analysed this trend in American law, which I call the ‘defamation-to-bankruptcy pipeline’, in Defamation, Bankruptcy & the First Amendment, published in the Journal of Free Speech Law.

The New Framework For Directors’ Duty To Creditors And The Challenges Ahead – Foo Kian Beng V Op3 International Pte Ltd (In Liquidation) [2024] 1 Slr 361, Jonathan Ren Hao Cheong

Singapore Law Journal (Lexicon)

In Foo Kian Beng v OP3 International Pte Ltd (in liquidation) [2024] 1 SLR 361, the Singapore Court of Appeal introduced a two-step, three-category framework for evaluating whether a director has breached his fiduciary duty to consider the interests of creditors. This decision not only affirms the traditional understanding of the duty in other common law jurisdictions but also provides directors with clearer guidance on managing the affairs of the company in times of financial distress. This article builds upon the discussion in Foo Kian Beng by evaluating the new framework established by the SGCA. It also identifies potential challenges …

The Crucial Role Of Insolvency Law In Job Creation And Preservation, Andrés F. Martínez, Aurelio Gurrea-Martinez, Harish Natarajan

Research Collection Yong Pung How School Of Law

When companies face financial trouble, potential job losses can be a major risk for people and—depending on the size of the company or industry in trouble—a risk to local or national economies. An efficient insolvency system can mitigate this risk while contributing to the creation of more and better jobs. As jobs are the most critical tool in fighting poverty, a better understanding of the effects of insolvency law on employment is vital for development work.

The Safe Harbor For Leveraged Buyouts In Bankruptcy, David G. Carlson

Articles

No abstract provided.

Law School News: John Dorsey L'10 Selected For U.S. Bankruptcy Court In Rhode Island 6-7-2025, Helga Melgar

Life of the Law School (1993- )

No abstract provided.

Insolvency Law As A Catalyst For Growth, Aurelio Gurrea-Martinez

Research Collection Yong Pung How School Of Law

Insolvency law plays an essential role in the real economy. From an ex ante perspective, that is, before a situation of insolvency arises, the design of insolvency law affects how debtors and creditors make decisions. For instance, if creditors believe that an insolvency system does not protect their rights or it does not help them maximize their recoveries if their debtors become insolvent, they will rationally become reluctant to extend credit. Therefore, an unattractive insolvency regime for creditors will harm firms’ access to finance and the promotion of economic growth. Similarly, an insolvency system that severely punishes honest but unfortunate …

The Latin American Principles For Out-Of-Court Workouts, Aurelio Gurrea-Martinez, Adolfo Rouillon

Research Collection Yong Pung How School Of Law

Out-of-court workouts can save significant costs associated with the initiation of a formal insolvency proceeding. Therefore, they can help minimise the loss of value experienced by an insolvent firm, ultimately contributing to the maximisation of the returns to creditors and the reorganisation of viable but financially distressed businesses. Additionally, an out-of-court agreement can provide a level of flexibility and confidentiality that is usually lacking in formal insolvency proceedings. Thus, an out-of-court workout can serve as a valuable mechanism to deal with a situation of financial distress, especially in the context of countries with inefficient insolvency systems and companies with concentrated …

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 …

The Digitalization Of Insolvency Proceedings, Aurelio Gurrea-Martinez

Research Collection Yong Pung How School Of Law

Despite the international divergences existing in the design of insolvency law, there is a common feature of insolvency proceedings that, to a greater or lesser extent, is somehow universal: insolvency proceedings are generally costly and lengthy processes. For that reason, it is not surprising that a significant body of the literature on insolvency law deals with different mechanisms to make insolvency proceedings more efficient. This article examines how technology can contribute to that goal. To that end, it starts by reviewing how countries are deploying, or can deploy, technology in different aspects and stages of insolvency proceedings and how such …

A Lawyer’S Duty To Maintain Prospective Client Confidentiality To Avoid Disqualification In Bankruptcy Matters, Victoria Rey

Bankruptcy Research Library

(Excerpt)

The legal profession imposes strict ethical duties on attorneys to maintain client confidentiality. While this duty is traditionally associated with formal attorney-client relationships, it also extends to prospective clients–individuals who consult an attorney about potential representation, even if they do not ultimately retain the attorney. In bankruptcy proceedings, where prospective clients often disclose sensitive financial information, the duty of confidentiality is crucial. This duty is essential for preserving the integrity of the bankruptcy process, preventing conflicts of interest, and ensuring fairness for all parties involved. As a result, a breach of this duty may warrant the disqualification of counsel. …

Applicability Of Section 109(A)’S Debtor Eligibility Requirements To Chapter 15 Cases, Aisha K. Sabar

Bankruptcy Research Library

(Excerpt)

Upon a petition for recognition, a foreign insolvency case may be recognized in the United States under chapter 15 of title 11 of the United States Code (the "Bankruptcy Code"). Courts are divided as to whether section 109(a)’s debtor eligibility requirements, which apply to U.S. bankruptcy cases, apply to a chapter 15 case. In the Second Circuit, a foreign representative will have to demonstrate that the debtor satisfies section 109(a)’s requirement of being "a person who resides or has a domicile, a place of business, or property in the United States, or a municipality," while debtors situated in the …