Bankruptcy Law Commons^™

Presentation Remarks, Marvin Isgur

Emory Bankruptcy Developments Journal

No abstract provided.

The Fresh Start Paradox: Economic Disaster Relief Available To Title 11 Debtors, Kellsie Davis Ruane

Emory Bankruptcy Developments Journal

The Small Business Administration (“SBA”) has been providing disaster relief in the form of Economic Injury Disaster Loans (“EIDLs”) since its inception in 1953. In the context of the COVID-19 pandemic, the CARES Act charged the SBA with issuing forgivable loans through the Paycheck Protection Program (“PPP”) to small businesses which would otherwise face permanent closure. Though the CARES Act did not specifically grant the SBA authority to do so, the SBA interpreted its powers to include the ability to set requirements for loan approval which were not laid out in the Act itself. Specifically, the SBA promulgated a rule …

“Engaged In”: The Rocky Marriage Between Commercial And Business Activity And Subchapter V Eligibility, Blake Clevenger

Emory Bankruptcy Developments Journal

The Small Business Reorganization Act of 2019, which created subchapter V bankruptcy relief for eligible small business debtors, is a step towards a small-business-friendly bankruptcy environment. The legislative history of subchapter V stated the goal of this new statute was to provide a cost-effective and streamlined path to reorganization to allow financially distressed small businesses to remain in business. To be eligible for subchapter V relief, a debtor must, among other requirements, be “engaged in commercial or business activities.” However, courts have continuously disagreed on the meaning of “engaged in commercial or business activities.” Courts have …

Fake And Real People In Bankruptcy, Melissa B. Jacoby

Emory Bankruptcy Developments Journal

This essay explores the bankruptcy system’s structural bias in favor of artificial persons—for-profit companies, non-profit enterprises, and municipalities given independent life by law—relative to humans. The favorable treatment extends to foundational issues such as the scope and timing of debt relief, the conditions to receiving any bankruptcy protections, and the flexibility to depart from the Bankruptcy Code by asserting that doing so will maximize economic value. The system’s bias also contributes to the “bad-apple-ing” of serious policy problems, running counter to other areas of law that have deemed harms like discrimination to be larger institutional phenomena rather than merely the …

The Future Of Arbitration In The United States: Textualism, A Tectonic Shift, And A Reshaping Of The Civil Justice System, Imre S. Szalai

Cardozo Journal of Conflict Resolution

No abstract provided.

Corporate Governance And Gender Equality: A Study Of Comply-Or-Explain Disclosure Regulation, Aaron A. Dhir, Sarah Kaplan, Maria Arabella Robles

Seattle University Law Review

In 2020, the Nasdaq Stock Market filed a proposal with the U.S. Securities and Exchange Commission seeking permission to adopt a board diversity-related disclosure requirement for its listed companies. In 2021, the SEC approved the proposal, thus entrenching Nasdaq’s position as the most significant stock exchange to date to mandate listing rules that reflect the intention of diversifying corporate boardrooms. Nasdaq’s movement into the diversity space is not the first attempt to address homogeneous boards in the U.S. In 2009, the SEC adopted a rule requiring publicly traded firms to report on whether they consider diversity in identifying director nominees. …

Judicial Ethics And The Eradication Of Racism, Dontay Proctor-Mills

Seattle University Law Review

In 2020, the Washington Supreme Court entrusted the legal community with working to eradicate racism from its legal system. Soon after, Washington’s Commission on Judicial Conduct (hereinafter the Commission) received a complaint about a bus ad for North Seattle College featuring King County Superior Court Judge David Keenan. Along with a photo of Judge Keenan’s face, the ad included the following language: “A Superior Court Judge, David Keenan got into law in part to advocate for marginalized communities. David’s changing the world. He started at North.” The Commission admonished Judge Keenan for violating the Code of Judicial Conduct, in part …

Table Of Contents, Seattle University Law Review

Seattle University Law Review

Table of Contents

Why Corporate Boards Should Include Lgbtq+ People, Jeremy Mcclane, Darren Rosenblum

Seattle University Law Review

Corporate boardrooms sit at the heart of most of society’s most consequential decisions but fall far short of the diversity of our society. The current movement toward board diversification aims to remedy the underrepresentation of marginalized groups on corporate boards. More recently, some efforts have included LGBTQ+ people, even though the basis for their inclusion on corporate boards remains largely unstated. This Article examines both the normative and instrumental bases for LGBTQ+ inclusion in board diversity initiatives, articulating unspoken assumptions and linking LGBTQ+ people to the broader inclusion effort. In so doing, it begins to surface the unique issues LGBTQ+ …

Introduction: A Tribute To Hon. David R. Jones, Adriano Omar Iqbal

Emory Bankruptcy Developments Journal

No abstract provided.

Reconceptualizing Bankruptcy Education Requirements For Incarcerated Debtors, Sydney Calas

Emory Bankruptcy Developments Journal

In the eighteen years since Congress enacted the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA), bankruptcy scholars and professionals have launched countless critiques against two of the Act’s more drastic amendments: (1) mandatory pre-filing credit counseling and (2) a mandatory post-filing financial management course. Without completing the pre-filing requirement, one cannot qualify as a debtor under the Code and is thus barred from filing for bankruptcy. Without completing the post-filing requirement, one cannot receive a discharge. Notwithstanding the volume and breadth of valid criticisms, the specific harm of BAPCPA’s education requirements has been largely ignored for one population: incarcerated …

America’S Public Shell Trafficking Problem: Ripe For Reprocessing, Harrison Lipsky

Emory Bankruptcy Developments Journal

The scourge of public shell trafficking has led to fraudsters taking advantage of and pilfering the hard-earned dollars of the American investing public for decades. These fraudsters seek to abuse the chapter 11 bankruptcy process by discharging the debt of such public shells, so that they can increase the profitability of schemes that target innocent investors, such as reverse mergers and pump-and-dump schemes. Regulators and lawmakers alike have fought back against this phenomenon through statutory reform and targeted regulatory programs; recently, their principal method of fighting back has been to consistently object to chapter 11 plans of reorganization that could …

Standardizing And Unbundling The Sub Rosa Dip Loan, Kenneth Ayotte, Alex Zhicheng Huang

Emory Bankruptcy Developments Journal

In many recent chapter 11 cases, debtor-in-possession (“DIP”) loans determine reorganization plan payoffs at the outset of the case. Recent DIP loans are tied to plan terms including rights offerings, which give the DIP lender exclusive rights to purchase discounted equity in the reorganized company, and backstop fees, which pay the rights holder for committing to purchase them. Terms like these raise fears that DIP loan approval is being used to short circuit the chapter 11 reorganization plan process—in bankruptcy parlance, that the DIP loan is a sub rosa plan. How should bankruptcy law manage this sub rosa DIP loan …

Defi: Shadow Banking 2.0?, Hilary J. Allen

Scholarly Articles in Law Reviews & Journals

The growth of so-called “shadow banking” was a significant contributor to the financial crisis of 2008, which had huge social costs that we still grapple with today. Our financial regulatory system still hasn’t fully figured out how to address the risks of the derivatives, securitizations, and money market mutual funds that comprised Shadow Banking 1.0, but we’re already facing the prospect o fShadow Banking 2.0in the form of decentralized finance, or “DeFi.” DeFi’s proponents speak of a future where sending money is as easy as sending a photograph–but money is not the same as a photograph. The stakes are much …

Introductory Remarks, Ethan Bordman, Ira S. Dizengoff, Sophie Dizengoff

Cardozo Arts & Entertainment Law Journal

The article discusses the legal implications and challenges surrounding college athletes' rights to profit from their name, image, and likeness (NIL), following the NCAA's 2021 decision to lift its ban on athletes cashing in on their fame. The symposium explores the evolving legal landscape, including regulatory frameworks, equity issues, and the role of collectives, highlighting the need for clearer guidelines to address the complexities arising from this change.

Sales Free And Clear Of An Intellectual Property Licensee's Interests In Bankruptcy -- Looking To In Re Tempnology For Guidance, Summer Chandler

Journal Articles

Uncertainty surrounds many issues that exist at the intersection of bankruptcy law and intellectual property law. Section 363(f) of the Bankruptcy Code permits the debtor to sell assets free of a third party’s interest in such assets, provided one or more preconditions is satisfied. When a debtor rejects a license agreement pertaining to the debtor’s intellectual property, however, § 365(n) of the Bankruptcy Code allows the licensee to choose to retain its rights to use the intellectual property that was the subject of the rejected license agreement. One unsettled question is whether a debtor may sell intellectual property pursuant to …

Sovereign Immunity Tests Bankruptcy’S Least Contested Axioms, Deborah L. Thorne, Luke L. Sperduto

Emory Bankruptcy Developments Journal

Section 106 of the Bankruptcy Code expressly abrogates the sovereign immunity of governmental units with respect to fifty-nine other provisions of the Code. There are currently two distinct issues splitting circuit courts over the meaning of this provision. First, does section 106 waive the sovereign immunity of the Internal Revenue Service in avoidance actions brought against it by a bankruptcy trustee under section 544(b)? Second, are Native American Indian Tribes “governmental units” within the meaning of section 101(27), such that their sovereign immunity is abrogated to the extent set forth in section 106? Invoking conventional canons of statutory construction, this …

Alliance Politics In Corporate Debt Restructurings, Diane Lourdes Dick

Emory Bankruptcy Developments Journal

Alliance politics have always been a complicating factor in corporate restructurings. Negotiations between and among large groups of corporate stakeholders naturally require that parties expend time and resources on building coalitions, overcoming holdouts, and fleshing out their collective action. But recent trends suggest that alliance politics—rather than sound financial and economic decisions—may be driving restructuring outcomes, introducing new risks and inefficiencies in the financial markets. For instance, restructuring proponents increasingly use wedge strategies and divide-and-conquer tactics to exacerbate the coordination problems that lenders in large syndicates already face, giving rise to hostile restructurings that have the potential to introduce dangerous …

Bankruptcy In The Golden Years: The Case For Increasing Exemptions For Elderly Americans, Danny Fitzpatrick

Emory Bankruptcy Developments Journal

This Comment analyzes 11 U.S.C. § 522(d) and several state exemption statutes for their success at providing elderly debtors sufficient exemptions to maintain their quality of life after filing for bankruptcy. Exemptions are assets that are excluded from an individual debtor’s estate upon filing for bankruptcy and that serve as protection against creditors stripping the debtor of all pre-petition property interests. State and federal exemptions vary dramatically, with some states carving out additional exemptions specifically for elderly debtors. For example, states like Massachusetts and Maine recognize additional exemptions for elderly debtors with regards to their homesteads.

Bankruptcy filing …

Acceptance Remarks, David R. Jones

Emory Bankruptcy Developments Journal

No abstract provided.

Big Banks & Small Consequences In Chapter 13, Alexandra P.E. Sickler

Emory Bankruptcy Developments Journal

Mortgage creditors struggle to properly service mortgages in chapter 13 cases, as evidenced by numerous cases describing violations of Bankruptcy Rule 3002.1. The consumer bankruptcy system, however, is not calibrated to compel systemwide compliance from these large, institutional repeat actors. This Essay argues that the Consumer Financial Protection Bureau (CFPB) is well-suited to support the consumer bankruptcy system by exercising its monitoring and enforcement powers to promote, and even compel, mortgage creditor compliance in chapter 13 cases.

Status Check: Should The Federal Tax Status Of A Disregarded Debtor Be Property Of The Estate?, J. Benjamin Ward

Emory Bankruptcy Developments Journal

This Comment focuses on whether the tax status of a debtor constitutes “property” of the debtor’s estate under 11 U.S.C. § 541(a). The answer to this question ultimately determines whether a bankruptcy trustee has the power to avoid a “check-the-box” tax status change made by the owner of a debtor entity from a “pass-through” to a separately taxed C Corporation. This issue normally arises when the parent corporation or individual owner of a debtor subsidiary corporation or disregarded entity (to the individual owner) elects to transform the status of the debtor by “checking the box” on the proper federal tax …

The Purloined Debtor: Edgar Allan Poe’S Bankruptcy In Law And Letters, Erin L. Sheley, Zvi Rosen

Faculty Scholarship

This Article represents the first interdisciplinary case study of Edgar Allan Poe’s bankruptcy as an inflection point in the legal and cultural history of debt. Although Poe hardly leaps to mind for portrayals of legal procedure, much of his oeuvre reveals a terror of legal process as an interstitial principle. The anxiety around identity in Poe’s work reveals an ongoing struggle between an individual subject and two opposing yet equally degenerate legal statuses: possession and indebtedness. This opposition renders a distinct form of legal process legible in these texts: the then emerging law of bankruptcy. Poe declared bankruptcy at a …

Disaggregating State Bankruptcy, Michael A. Francus

Journal Articles

States today face fiscal challenges that they cannot surmount. With trillions in debt and billions in deficits, states are rapidly reaching the point where they cannot satisfy their obligations to pensioners, employees, and residents. This deterioration of state finances has, in turn, revived the debate over whether Congress should expand the Bankruptcy Code to allow states to file for bankruptcy. The debate, though, overlooks how, as a practical matter, bankruptcy is already available to financially distressed states. Chapter 9 of the Bankruptcy Code permits a state’s political subdivisions, public agencies, and instrumentalities to file for bankruptcy if the state authorizes …

“Buy Now, Pay Later: No Fees. No Credit Check.”, Elaine Lee

Seattle Journal of Technology, Environmental, & Innovation Law

Afterpay and Affirm, are financial technology (“fintech”) platforms that allow consumers to split their low-cost purchases into four installment payments–with seemingly no interest, fees, or hard credit inquiries. Similar to retailer fees on credit card transactions, these companies generate most of their profits as the intermediary between consumers and merchants. By flaunting celebrities like A$AP Rocky and Keke Palmer, the loan products are heavily advertised as the “cool” alternative to traditional credit cards and are particularly well-received among Millennials and Generation Z (“Gen Z”) consumers. Consequently, consumer advocates are duly concerned that lenders irresponsibly extend credit to a young generation, …

A Claims Agent Can Only Profit From The Fees The Clerk Of Court Can Charge, Peter Berkanish

Bankruptcy Research Library

(Excerpt)

In the Southern District of New York, the retention of claims agents is governed by the judicial procedure set forth in section 156(c) of title 28 of the United States Code, for cases under chapter 11 of title 11 of the United States Code (the “Bankruptcy Code”) that involve 250 or more creditors and equity holders. When a claims agent is retained under section 156(c), the claims agent is acting in the same capacity as the clerk and the services are “limited in scope to those duties that would be performed by a Clerk of Court with respect to …

The Intersection Of The Bankruptcy Courts And Ferc, Amanda Gazzo

Bankruptcy Research Library

(Excerpt)

In the past, the bankruptcy courts and the Federal Energy Regulatory Commission (“FERC”) have been involved in a power struggle with one another. Congress has granted bankruptcy courts exclusive authority to allow debtors to reject executory contracts in chapter 11 reorganization cases. Additionally, Congress has granted FERC authority to govern over utility entities’ filed-rates, which are sometimes contained in executory contracts. It is in this intersection, regarding executory contracts containing filed-rates, where the power struggle between the two exists.

An executory contract is a contract where both parties still have material obligations to perform under the contract. Filed-rates may …

Bad Faith Dismissals In Chapter 7, Myah Drouin

Bankruptcy Research Library

(Excerpt)

Title 11 of the United States Code (the “Bankruptcy Code”) provides a fresh start to the “honest but unfortunate debtor.” Chapter 7 therefore permits a debtor to “discharge their outstanding debts in exchange for liquidating their nonexempt assets and distributing them to their creditors.” Dismissals in chapter 7 are governed by section 707 of the Bankruptcy Code. Section 707(a) governs all chapters of bankruptcy filings and applies when adequate “cause” is shown.

There is currently a circuit split regarding whether a debtor’s lack of good faith constitutes cause for dismissal under section 707(a). Under section 707(a), a case may …

The Dischargeability Of Money Judgements Versus Property Interests In Arbitration Awards For Domestic Contributions In The Context Of Unmarried Couples, Gabriella Hansen

Bankruptcy Research Library

(Excerpt)

A debt which arises prior to the filing of the petition for discharge in bankruptcy is dischargeable unless it can be categorized as one of the statutory exceptions to discharge listed in section 523(a) of title 11 of the United States Code (the “Bankruptcy Code”). Section 523(a)(5) of the Bankruptcy Code prohibits the discharge of awards of domestic support due to a debtor’s spouse, former spouse, or child. Accordingly, maintenance, alimony, and child support, often awarded in divorce proceedings, fall under the federal bankruptcy law statutory exceptions to discharge for domestic support obligations.

When an unmarried couple separates and …

Exceptions To The General Rule That The Automatic Stay Under Bankruptcy Code Section 362(A) Does Not Apply To Non-Debtors, Annmarie Gruick

Bankruptcy Research Library

(Excerpt)

Upon the filing of a bankruptcy petition, the automatic stay takes effect. “The automatic stay is one of the fundamental debtor protections provided by the bankruptcy laws. It gives the debtor a breathing spell from its creditors. It stops all collection efforts, all harassment, and all foreclosure actions. It permits the debtor to attempt a repayment or reorganization plan, or simply to be relieved of the financial pressures that drove him [or her] into bankruptcy.”

Section 362(a) enumerates eight (8) actions and activities from which the debtor is protected—“it does not protect separate legal entities, such as corporate directors, …