Bankruptcy Law Commons^™

Relational Preferences In Chapter 11 Proceedings, Brook E. Gotberg

Faculty Publications

It is no secret that creditors hate so-called "preference" actions, which permit a debtor to recover payments made to creditors on the eve of bankruptcy for the benefit of the estate. Nominally, preference actions are intended to equalize the extent to which each unsecured creditor must bear the loss of a bankruptcy discharge, or to discourage creditors from rushing to collect from the debtor in such a way that will push an insolvent debtor into bankruptcy. But empirical evidence strongly suggests that, at least in chapter 11 reorganization proceedings, preference actions do not fulfill either of these stated goals. Interviews …

Predicting Chapter 11 Bankruptcy Case Outcomes Using The Federal Judicial Center Idb And Ensemble Artificial Intelligence, Warren E. Agin, Gill Eapen

Georgia State University Law Review

In this project, the authors obtained public data on over 100,000 Chapter 11 bankruptcy cases and used machine and deep-learning methodologies to explore whether models could be designed to predict Chapter 11 case outcomes. The data used was obtained from the Federal Judicial Center’s bankruptcy Integrated Database and included information about case filing dates, the court where the case was filed, the type of business entity, and basic information about assets and liabilities. Using this information, the authors initially sought to predict whether a particular case was dismissed, converted to another Chapter under the Bankruptcy Code, or closed with a …

Civil Rico: An Effective Deterrent To Fraudulent Asbestos Litigation?, Lester Brickman

Cardozo Law Review

In January 2014, U.S. Bankruptcy Judge George Hodges, presiding over the asbestos-related bankruptcy of Garlock Sealing Technologies, LLC, a manufacturer of gaskets containing asbestos, issued an order estimating Garlock's liability for pending and future mesothelioma cases. Judge Hodges, after hearing evidence discovered by Garlock in a sampling of settled cases, rejected using the usual bankruptcy court recourse to the debtor's historic settlement values as a valid basis for estimating Garlock's total future liability for asbestos-related injuries. He found that Garlock's prior mesothelioma settlements were not a reliable predictor of Garlock's liability because those settlements had been infected by misrepresentations by …

Sec V. Creditors: Why Sec Civil Enforcement Practice Demonstrates The Need For A Reprioritization Of Securities Fraud Claims In Bankruptcy, Sean Kelly

St. John's Law Review

(Excerpt)

This Note examines how this tension has motivated the SEC to use receiverships as a preferred vehicle to maximize recovery for defrauded security holders and, in the process, create what amounts to an SEC-run bankruptcy proceeding. The use of these receiverships has triggered a high-stakes race to the courthouse among the SEC and creditors, where mere hours can be the difference between millions in recovery and nothing at all. To end this costly race, this Note proposes a solution that seeks to harmonize securities fraud enforcement with bankruptcy law, which starts with revisiting Bankruptcy Code § 510(b) to reprioritize …

In Whose Interests Should A Company Be Run? Fiduciary Duties Of Directors During Corporate Failure In India: Looking To The West For Answers, Gautam Sundaresh

Michigan Business & Entrepreneurial Law Review

This Comment looks at the debate as it has played out in the legal jurisprudence of the U.S. and the U.K. The analysis of each considers the three financial stages of a corporation’s existence that are specifically addressed in the debate today, i.e.: (i) solvency; (ii) insolvency; and (iii) the zone of insolvency. After setting out the current position, this Comment specifically addresses the various shortcomings and criticisms of the models adopted by each jurisdiction and offers observations on the status quo and the implementation of these models. On this basis, this Comment goes on to propose a model to …

The Dialogic Aspect Of Soft Law In International Insolvency: Discord, Digression, And Development, John A. E. Pottow

Michigan Journal of International Law

In this study, I describe three important articles in the IRJ model law and discuss their development, drawing in part upon my experience as a delegate to UNCITRAL Working Group V. In doing so, I want to situate these developments within the broader discussions of international law and international relations theory regarding soft law. Doing so will both vindicate and puzzle some of the conventional understanding of how soft law instruments tend to function, although some of the conclusions must necessarily be conjectural at this stage.

Fiduciary Principles In Bankruptcy And Insolvency, John A.E. Pottow

Book Chapters

This chapter examines fiduciary duties in bankruptcy and insolvency, focusing on the bankruptcy trustee’s duties, which are triggered by virtue of appointment in a case. It first provides a background on bankruptcy law in order to elucidate the doctrines and rules affecting fiduciary responsibilities in bankruptcy, citing a number of relevant provisions in the Bankruptcy Code. It then considers the fiduciary, non-fiduciary, and anti-fiduciary obligations of the trustee under the Bankruptcy Code before discussing the fiduciary duties of care and loyalty. In particular, it highlights bankruptcy-related issues raised by the duty of loyalty with respect to secured creditors, priority unsecured …

One Dollar, One Vote: Mark-To-Market Governance In Bankruptcy, Edward J. Janger, Adam J. Levitan

Faculty Scholarship

No abstract provided.

A Means Test At Odds With Itself: The Secured Debt Expense In Chapter 7 Consumer Bankruptcy Cases After The Supreme Court’S Decision In Lanning And Ransom, Roma Perez

University of Miami Business Law Review

No abstract provided.

Business Law Bulletin, Spring 2019

Business Law Bulletin

No abstract provided.

Is The Gate Open For West Virginia Counties And Cities To File For Chapter 9 Bankruptcy Relief, Bill Pepper

West Virginia Law Review

No abstract provided.

Reforming Institutions: The Judicial Function In Bankruptcy And Public Law Litigation, Kathleen G. Noonan, Jonathan C. Lipson, William Simon

Indiana Law Journal

Public law litigation (PLL) is among the most important and controversial types of dispute that courts face. These civil class actions seek to reform public agencies such as police departments, prison systems, and child welfare agencies that have failed to meet basic statutory or constitutional obligations. They are controversial because critics assume that judicial intervention is categorically undemocratic or beyond judicial expertise.

This Article reveals flaws in these criticisms by comparing the judicial function in PLL to that in corporate bankruptcy, where the value and legitimacy of judicial intervention are better understood and more accepted. Our comparison shows that judicial …

Hedge Funds In The Periphery: An Analysis Of Structures Influencing Fund Behavior In The Icelandic And Cypriot Financial Crises, Jameson K. Mah

Undergraduate Economic Review

Hedge funds are often viewed from a positive or negative lens in the public and academic forum. However, both of these perspectives neglect structuralist factors. This paper analyzes the effect of these antecedent economic, political, and legal structures. I argue that these structures are at the root of hedge fund behavior, particularly during financial crises. The financial crises of two peripheral countries, Iceland and Cyprus, are used as case studies to illustrate how hedge fund involvement diverges as a result of structural factors.

The Lehman Brothers Bankruptcy G: The Special Case Of Derivatives, Rosalind Z. Wiggins, Andrew Metrick

Journal of Financial Crises

When it filed for bankruptcy protection in September 2008, Lehman Brothers was an active participant in the derivatives market and was party to 906,000 derivative transactions of all types under 6,120 ISDA Master Agreements with an estimated notional value of $35 trillion. The majority of Lehman’s derivatives were bilateral agreements not traded on an exchange but in the over-the-counter (OTC) market. Because derivatives enjoyed an exemption from the automatic stay provisions of the U.S. Bankruptcy Code, parties to Lehman’s derivatives could seek resolution and self-protection without the guidance and restraint of the bankruptcy court. The rush of counterparties to novate …

The Lehman Brothers Bankruptcy F: Introduction To The Isda Master Agreement, Christian M. Mcnamara, Andrew Metrick

Journal of Financial Crises

When Lehman Brothers Holdings, Inc. (LBHI) sought Chapter 11 protection, the more than 6,000 counterparties with which its subsidiaries had entered into over 900,000 over-the-counter (OTC) derivatives transactions faced the question of how best to respond to protect their interests. The existence of standardized documentation developed by the International Swaps and Derivatives Association (ISDA) for entering into such transactions meant that the counterparties likely thought that they were dealing with a well-defined and robust set of options in answering this question. Yet, in practice, the resolution of Lehman’s OTC derivatives portfolio ended up being less orderly than the existence of …

The Lehman Brothers Bankruptcy E: The Effects On Lehman’S U.S. Broker-Dealer, Rosalind Z. Wiggins, Andrew Metrick

Journal of Financial Crises

Lehman’s U.S. broker-dealer, Lehman Brothers Inc. (LBI), was excluded from the parent company’s bankruptcy filing on September 15, 2008, because it was thought that the solvent subsidiary might be able to wind down its affairs in a normal fashion. However, the force of the parent’s demise proved too strong, and within days, LBI and dozens of Lehman subsidiaries around the world were also in liquidation. As a regulated broker-dealer, LBI was required to comply with the Securities and Exchange Commission financial-responsibility rules for broker-dealers, including maintaining customer assets separately. However, the corporate complexity and enterprise integration that characterized the Lehman …

The Lehman Brothers Bankruptcy A: Overview, Rosalind Z. Wiggins, Thomas Piontek, Andrew Metrick

Journal of Financial Crises

On September 15, 2008, Lehman Brothers Holdings, Inc., the fourth-largest U.S. investment bank, sought Chapter 11 protection, initiating the largest bankruptcy proceeding in U.S. history. The demise of the 164-year old firm was a seminal event in the global financial crisis. Under the direction of its long-time Chief Executive Officer Richard Fuld, Lehman had been very successful pursuing a high-leverage, high-risk business model that required it to daily raise billions of dollars to fund its operations. Beginning in 2006, Lehman began to invest aggressively in real-estate-related assets and soon had significant exposures to housing and subprime mortgages, just as these …

Puerto Rico V. Franklin California Tax-Free Trust, Brittney E. Ciarlo

Ohio Northern University Law Review

No abstract provided.

Bankruptcy, Morality & Student Loans: A Decade Of Error In Undue Hardship Analysis, Linn White

Ohio Northern University Law Review

In an effort to stem perceived abuses of the bankruptcy system, Congress adopted a rule in 1976 that created a time-based conditional limitation on the discharge of federally guaranteed student loans in bankruptcy. The only means of overcoming the limitation was the showing of an “undue hardship,” which was undefined by the legislature. This gave rise to two judicially created, means-based tests that were used to determine if the debtor was attempting to abuse the bankruptcy system. By the time the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA) was enacted, the time-based restriction was gone, leaving only …

Venezuela Undermines Gold Miner Crystallex's Attempts To Recover On Its Icsid Award, Sam Wesson

Loyola of Los Angeles International and Comparative Law Review

No abstract provided.

Event Program, Emory Bankruptcy Developments Journal

Emory Bankruptcy Developments Journal Symposia & Workshops

The Sixteenth Annual

EMORY BANKRUPTCY DEVELOPMENTS JOURNAL SYMPOSIUM

February 21, 2019 | 8:00 a.m. to 1:00 p.m. | Tull Auditorium

Table Of Contents, Seattle University Law Review

Seattle University Law Review

No abstract provided.

Clarifying The Scope Of The Self-Incrimination Clause: City Of Hays V. Vogt, Samantha Ruben

Chicago-Kent Law Review

Three months after oral arguments, the Supreme Court dismissed the writ of certiorari in City of Hays v. Vogt as improvidently granted. The question in Vogt was whether the Fifth Amendment right against self-incrimination is violated when incriminating statements are used at a probable cause hearing, as opposed to a criminal trial. As a result of the “DIG,” the Court left a circuit split unresolved surrounding the meaning of a “criminal case” within the Fifth Amendment’s Self-Incrimination Clause.

This note argues that the Supreme Court should not have dismissed Vogt and should have decided that the Fifth Amendment right against …

Puerto Rico Debt Restructuring: Origins Of A Constitutional And Humanitarian Crisis, Elizabeth Whiting

University of Miami Inter-American Law Review

No abstract provided.

Bankruptcy Law: Explaining Bankruptcy Forum Shopping, Jared A. Ellias

The Judges' Book

No abstract provided.

Modern Waste Law, Bankruptcy, And Residential Mortgage, Jill M. Fraley

Scholarly Articles

Around the time of the subprime mortgage collapse, lenders began in earnest to sue borrowers by adapting the traditional law of waste. Today, these claims continue to rise in frequency and to expand to more jurisdictions. Lender waste claims provide a “work around” for state mortgage laws that prohibit personal deficiency judgments after foreclosure and are potentially non-dischargeable in bankruptcy.

While a recent wave of scholarship has addressed the problems of how the bankruptcy system handles mortgages, scholars have not yet explored the use of waste actions by lenders and how waste judgments intersect with bankruptcy and foreclosure. Using new …

Stern Claims And Article Iii Adjudication - The Bankruptcy Judge Knows Best, Laura B. Bartell

Law Faculty Research Publications

No abstract provided.

Under A Confirmed Chapter 11 Plan A Liquidating Trustee May Have Sole Authority To Review And Object To Claims, Ryan C. Beil

Bankruptcy Research Library

(Excerpt)

A liquidating trust is one that is organized for the primary purpose of liquidating and distributing the assets transferred to it. When a plan under chapter 11 of title 11 of the United States Code (the “Bankruptcy Code”) is confirmed and establishes a liquidating trust, the trust is treated as a distinct entity. The liquidating trust terminates the debtor in possession’s status and conveys the estate’s rights and assets to a “liquidating trustee.” The confirmed plan does not simply substitute the trustee for the debtor-in-possession, but rather it creates a separate and distinct trust, holding certain property of the …

A Non-Profit Entity May Not Be Substantively Consolidated With An Affiliated Debtor, Rachel Armely

Bankruptcy Research Library

(Excerpt)

To date, over 19,000 sexual abuse claims, totaling claims in an aggregate amount of more than $4 billion, have been filed against individual dioceses within the Catholic Church. This influx of claims comes as the result of certain state legislatures allowing individuals with previously time-barred claims to bring civil lawsuits against the dioceses. Consequently, at least eighteen Catholic dioceses have filed voluntary petitions for relief under title 11 of the United States Code (the “Bankruptcy Code”).

In many cases, the majority of the Catholic dioceses’ assets are held by inter-related, non-profit Catholic entities that often collectively hold billions of …

Involuntary Bankruptcy Cases And Discretionary “For Cause” Dismissals, Jp Amato

Bankruptcy Research Library

(Exceprt)

This article addresses whether a bankruptcy court has the discretionary power to dismiss an involuntary bankruptcy case filed under chapters 7 or 11 of title 11 of the United States Code (the “Bankruptcy Code”) for cause when there is a finding of bad faith or a lack of good faith on behalf of the petitioning creditor or creditors. In short, it is unclear because there is insufficient authority on this issue in the involuntary context, and the issue remains split among the courts in the voluntary context.

This article first addresses the statutory requirements of an involuntary petition. Next, …