Bankruptcy Law Commons^™

Real-World And Academic Questions About Nonmonetary Obligations Under The 2005 Version Of 365(B), David G. Epstein

Law Faculty Publications

McLachlan, Countryman, Westbrook. More than most areas of bankruptcy law, the bankruptcy law of leases and contracts has been influenced by law professors. McLachlan is generally credited for inventing the bankruptcy law of leases and executory contracts; specifically, for drafting section 70(b) of the Bankruptcy Act-the predecessor of section 365. Countryman's law review articles based on work he did for the Commission to Study the Bankruptcy Laws of the United States led to the "Countryman definition" of "executory contracts." Additionally, Westbrook's article urging the elimination of the term "executory contract" and a clarification of the consequences of rejection shaped the …

New Challenges Following Bankruptcy Reform, Jeana Kim Reinbold

Public Interest Law Reporter

No abstract provided.

In Re Adelphia Communications Corp. (Decided Dec. 5, 2003), Phillip Mahoney

NYLS Law Review

No abstract provided.

Enforcing The Fair Housing Act: Can Agency Interpretations Override Congressional Intent In Anti-Discrimination Legislation?, Francesca Laguardia

Department of Justice Studies Faculty Scholarship and Creative Works

On October 12, 2005, the Southern District of New York ruled that the New York State Attorney General was enjoined from enforcing state laws prohibiting discriminatory lending against national banks.1 The court found in favor of the Office of the Comptroller of the Currency (OCC), the federal regulator of national banks. The OCC claimed that while state fair lending laws had not been preempted, the New York State Attorney General’s (OAG) authority to enforce those laws had been preempted by a series of federal statutes and OCC-written regulations that give the OCC exclusive authority to bring any enforcement action against …

Reply To Elizabeth Warren, F. Stephen Knippenberg

Faculty Articles

No abstract provided.

Procedural Incrementalism: A Model For International Bankruptcy, John A. E. Pottow

Articles

The headline-grabbing business failures of late have brought increased attention to the relatively unresolved area of multinational bankruptcies. Parmalat, Global Crossing, and United Airlines are among the few international juggernauts that have foundered. In the financial meltdowns of these cross-border institutions, assets and creditors are dispersed throughout commercial environments that rarely end neatly at national borders. There has been heated debate, both in scholarly literature and the practical battlefield, over how best to resolve these transnational insolvencies, and there is nothing yet approaching a consensus. Reform efforts of various stripes have almost uniformly failed to gain meaningful international support. At …

Serial Entrepreneurs And Small Business Bankruptcies, Douglas G. Baird, Edward R. Morrison

Faculty Scholarship

Chapter 11 is thought to preserve the going-concern surplus of a financially distressed business – the extra value that its assets possess in their current configuration. Financial distress leads to conflicts among creditors that can lead to inefficient liquidation of a business with going-concern surplus. Chapter 11 avoids this by providing the business with a way of fashioning a new capital structure. This account of Chapter 11 fails to capture what is happening in the typical case. The typical Chapter 11 debtor is a small corporation whose assets are not specialized and rarely worth enough to pay tax claims. There …

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 …

Take What You Can, Give Nothing Back: Judicial Estoppel, Employment Discrimination, Bankruptcy, And Piracy In The Courts, Theresa M. Beiner, Robert B. Chapman

Law Faculty Scholarship

No abstract provided.

Global Venue Controls Are Coming: A Reply To Professor Lopucki, Samuel Bufford

Faculty Scholarship

This Article details my disagreements with Professor Lynn LoPucki's article "Global and out of Control" (79 Am. Bankr. L.J. 79). Part I discusses universalism and territorialism, especially the modified version of universalism that I support. Part II examines the international venue provisions of the Model Law and the EU Regulation. Part III introduces the relevant venue shopping cases. Only two groups of cases are relevant for the purpose of this paper: the French and German subsidiaries of Daisytek and Eurofood (a subsidiary of Parmalat SpA, the Italian conglomerate). None of the other cases that Professor LoPucki discusses was subject to …

Undue Hardship In The Bankruptcy Courts: An Empirical Assessment Of The Discharge Of Educational Debt, Rafael I. Pardo, Michelle R. Lacey

Scholarship@WashULaw

The discharge in bankruptcy embodies the policy that relief should be granted to an individual who has ceased to be economically productive by virtue of burdensome debt obligations (the fresh start policy). Once the debtor has been deemed eligible for discharge, forgiveness of debt is automatic, accomplished through legislative rule and its judicial enforcement. With regard to the discharge of educational debt, however, Congress has devolved the exercise of debt relief to courts. An obligation to repay such debt will be discharged if a debtor establishes that undue hardship would be suffered in the absence of its discharge. A court …

Adversary Proceedings In Bankruptcy: A Sideshow, Douglas G. Baird, Edward R. Morrison

Faculty Scholarship

Across a broad range of cases, the civil trial is disappearing. In the early 1960s, about twelve percent of federal civil cases were resolved by trial; by 2002 that percentage had fallen to less than two percent. This sharp decline raises important questions about the quality y and costs of decisionmaking in federal district courts. After all, these courts exist to resolve cases and controversies. It matters whether (and why) these disputes are resolved in or outside the courtroom.

Marc Galanter and Elizabeth Warren suggest that the same thing is happening in the bankruptcy courts and that there is likewise …

How Law Affects Lending, Rainer F.H. Haselmann, Katharina Pistor, Vikrant Vig

Faculty Scholarship

The paper explores how legal change affects lending behavior of banks in twelve transition economies of Central and Eastern Europe. In contrast to previous studies, we use bank level rather than aggregate data, which allows us to control for country level heterogeneity and analyze the effect of legal change on different types of lenders. Using a differences-in-differences methodology to analyze the within country variation of changes in creditor rights protection, we find that the credit supplied by banks increases subsequent to legal change. Further, we show that collateral law matters more for credit market development than bankruptcy law. We also …

Financial Contracts And The New Bankruptcy Code: Insulating Markets From Bankrupt Debtors And Bankruptcy Judges, Edward R. Morrison, Joerg Riegel

Faculty Scholarship

The reforms of 2005 yield important but subtle changes in the Bankruptcy Code's treatment of financial contracts. They might appear only to eliminate longstanding uncertainty surrounding the protections available to financial contract counterparties, especially counterparties to repurchase transactions and other derivative contracts. But the ambit of the reforms is much broader. The expanded definitions – especially the definition of "swap agreement" – are now so broad that nearly every derivative contract is subject to the Code's protection. Instead of protecting particular counterparties to particular transactions, the Code now protects any counterparty to any derivative contract. Entire markets have been insulated …

Derivatives And The Bankruptcy Code: Why The Special Treatment?, Franklin R. Edwards, Edward R. Morrison

Faculty Scholarship

The collapse of Long Term Capital Management (LTCM) in Fall 1998 and the Federal Reserve Bank's subsequent efforts to orchestrate a bailout raise important questions about the structure of the Bankruptcy Code. The Code contains numerous provisions affording special treatment to financial derivatives contracts, the most important of which exempts these contracts from the "automatic stay" and permits counterparties to terminate derivatives contracts with a debtor in bankruptcy and seize underlying collateral. No other counterparty or creditor of the debtor has such freedom; to the contrary, the automatic stay prohibits them from undertaking any act that threatens the debtor's assets. …

Recoupment: Apples, Oranges And Fruit Basket Turnover, David G. Epstein

Law Faculty Publications

fiscal years and deducted the overpayment from its payments to H during that year. The fiscal year 2000 was also the year that H filed for Chapter 11. H filed an adversary proceeding against US contending that the deductions within four months before H's bankruptcy filing were voidable preferential transfers and that US's deductions after the bankruptcy filing were in violation of the automatic stay. The bankruptcy judge, the district court judge, and a unanimous appellate court panel looked to the law of recoupment to hold that US's reduction of payments was neither a preferential transfer nor a violation of …

Intellectualizing Property: The Tenuous Connections Between Land And Copyright, Stewart E. Sterk

Articles

Increased use of the intellectual property label to describe copyright and related areas of law has spawned analogies to the protections afforded real property. These analogies ignore significant differences between the foundations that undergird real and intellectual property rights. In particular, real property rights operate to avoid breaches of the peace and tragedies of the commons - problems that do not arise with intellectual works - while copyright and other intellectual property rights are designed to provide an incentive to create, an incentive irrelevant when land is at issue. These disparities in justification caution against routine importation of real property …