Bankruptcy Law Commons^™

Desperation Finance: Merchant Cash Advances In Bankruptcy And Beyond, Kara Bruce

Emory Bankruptcy Developments Journal

Over the last several years, Merchant Cash Advances (“MCAs”) have risen in prominence as a form of short-term financing for distressed small businesses. MCA transactions are distinct from most small-business lending because they are not structured as loans at all. Rather, in exchange for a lump sum of cash, the merchant purports to sell to the funder an unidentified percentage of its future receipts or receivables. This structure allows funders to sidestep the application of lending regulations and usury protections, but it strains the foundations of commercial law and generates a host of interpretive challenges.

Bankruptcy, district, and circuit courts …

Gendered Outcomes In Student Loan Bankruptcy, Jason Iuliano

Emory Bankruptcy Developments Journal

Women are winning more student loan bankruptcy cases than men, a notable reversal that challenges what we know about gender and legal outcomes. Drawing on hand-coded data from over 1,300 adversary proceedings spanning 2007 to 2023, this Article documents a sharp post-2022 shift. Women now succeed in 89% of cases compared to 82% for men.

The puzzle is that financial metrics cannot explain this gap. Men and women who file these cases look indistinguishable on paper: similar debt loads, comparable assets, and equivalent incomes. Legal representation explains part of the story. Women are slightly more likely to hire attorneys, and …

Holding The Debtor’S Fresh Start Hostage: Bankruptcy Courts Incorrectly Interpret Ransom V. Fia Card Services To Deny Debtors A Car Ownership Expense Deduction, Creola Johnson

Emory Bankruptcy Developments Journal

With the passage of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, Congress adopted for the first time a standardized income-based test for measuring an individual debtor’s “disposable income,” which is the amount a debtor must pay to unsecured creditors in a chapter 13 proceeding. Under the means test, debtors calculate their disposable income by deducting from income various standard expenses established by the Internal Revenue Service. One of those standard expenses is a vehicle ownership expense, which debtors can deduct if they have auto loan or lease payments. 

This Article is about bankruptcy courts who …

Acceptance Remarks For The 2026 Distinguished Service Award For Lifetime Achievement: Reflections On Journey, Learning And Paying It Forward, Jack Butler

Emory Bankruptcy Developments Journal

No abstract provided.

Rethinking Priority Rules In Insolvency, Anthony J. Casey, Aurelio Gurrea-Martinez

Emory Bankruptcy Developments Journal

No abstract provided.

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.