Bankruptcy Law Commons^™

Non-Procrustean Bankruptcy, Richard M. Hynes

Faculty Publications

Many advocates of bankruptcy reform bristle at aspects of the bankruptcy system they find distributively "unfair." These scholars point to the instances in which wealthy debtors have been able to retain million-dollar homes and luxury items, examples which at first glance might offend any reasonable sense of decency or fairness. Yet if bankruptcy provides insurance otherwise unavailable because of market failures, then an ideal bankruptcy system would embrace much of this inequality in post-bankruptcy standards of living. The wealthy generally choose private contracts that ensure their high standards of living. Though others envy these benefits, they do not wish to …

An Empirical Investigation Of Liquidation Choices Of Failed High Tech Firms, Ronald J. Mann

Faculty Scholarship

Perhaps it is merely a reflection of my interests, but to my mind, empirical research requires a certain risk-preferent boldness. I like projects that explore how and why particular businesses make important decisions. After I identify a topic, I typically try to gather as much qualitative and quantitative information about it as I can, with the expectation that when I have learned a great deal about the topic something interesting will emerge that relates in some important way to an ongoing academic debate. Those projects usually do not begin with a specific hypothesis to prove or disprove-often either answer will …

Bankruptcy's Acephalous Moment: Postpetition Transfers Under The Bankruptcy Code, David G. Carlson

Articles

No abstract provided.

The Control Of Wealth In Bankruptcy, Jay L. Westbrook

ExpressO

No abstract provided.

The Logical Structure Of Fraudulent Transfers And Equitable Subordination, David G. Carlson

Articles

No abstract provided.

The Implied Waiver Solution To The Problem Of Privilege In The Individual Bankruptcy Case, Laura B. Bartell

Law Faculty Research Publications

No abstract provided.

A Primer On Cramdown - How And Why It Works, Richard Maloy

St. Thomas Law Review

Cramdown has been referred to as "the iron maiden of bankruptcy reorganizations- the dreaded cramdown." The object of this paper is to see whether that uncomplimentary reference is a "bum rap" or a deserved appellation. Obfuscated though it may be, is this feature of the Bankruptcy Code really a medieval form of torture, or when fully understood is it just another statutory provision that could have been more clearly drafted? "Cramdown" is not a word used by the Code. It is a lawyers' euphemism for a very vital part of Chapters 9,3 11,4 12,5 and 136 of the Code-the statutory …

Financial Collapse And Class Status: Who Goes Bankrupt?, Elizabeth Warren

Osgoode Hall Law Journal

Every policy prescription, economic analysis, or news report about consumer bankruptcy rests on one or another unspoken image of the estimated 1.5 million families that will file in a single year. Data from the 2001 Consumer Bankruptcy Project permit a systematic analysis of the composition of those who file for personal bankruptcy, focusing on their education, occupation, and home ownership status. These attributes serve as a proxy for class identification. Based on these indicia, more than 90 per cent of the families in bankruptcy qualify as middle class. These data are a powerful reminder that whatever else might be said …

Is Revised Ucc Article 9 An Anti-Bankruptcy Act? Yes, G. Ray Warner

Faculty Publications

(Excerpt)

Professor Harrell's article is an excellent addition to the discussion that I hoped to stimulate with my article on the bankruptcy implications of the Article 9 revision. I will not attempt here to respond to each specific point he has made, as I believe that my original article adequately sets forth my views.

I was, and I remain, convinced that the Article 9 revision project had as an agenda changing bankruptcy law and I believe that, as a result, the drafters exceeded the proper role of a non-governmental, state-based, supposedly neutral, law reform institution. My earlier anti-bankruptcy article was …

Closing A Bankruptcy Loop-Hole Or Impairing A Debtor's Fresh Start? Sarbanes-Oxley Creates A New Exception To Discharge, Lucian Murley

Kentucky Law Journal

No abstract provided.

Corporate Governance Reform And Reemergence From Bankruptcy: Putting The Structure Back In Restructuring, Charles M. Elson, Paul M. Helms, James R. Moncus

Vanderbilt Law Review

A company's descent into bankruptcy may result from one or more troubling factors. Often the failing enterprise has adopted a poor business model, been led by deficient management, or labored under an unworkable capital structure. More often than not, a business failure is also accompanied by a less-than-ideal corporate governance structure within the organization. The failure to adopt an effective corporate governance model often leads to a sterile, inactive board of directors and may hasten a firm's demise. Conversely, proper corporate governance may prevent a business's slide into Chapter 11. Indeed, several studies have demonstrated a strong relationship between corporate …

Why Are Delaware And New York Bankruptcy Reorganizations Failing?, Lynn M. Lopucki, Joseph W. Doherty

Vanderbilt Law Review

Before 1990, the United States Bankruptcy Court for the District of Delaware was a sleepy backwater. During the entire decade of the 1980s, Phoenix Steel-whose only plant was located in Delaware-was the only large, public company to file there. In 1990, two large, public companies-Continental Airlines and United Merchants and Manufacturers-filed in Delaware. They constituted 7% of the twenty-nine large, public companies filing in the United States that year. From 1990 to 1996, Delaware's market share steadily increased to 87% (thirteen of fifteen cases).' In just seven years, Delaware had become the bankruptcy reorganization capital of the United States.

Lynn …

Chapter 11 Reorganization Cases And The Delaware Myth, Harvey R. Miller

Vanderbilt Law Review

Since the mid-1990s, there has been a spirited debate concerning the emergence of the United States Bankruptcy Court for the District of Delaware (the "Delaware Bankruptcy Court") as the virtual Chapter 11 capital for distressed debtor corporations. The "Delawarization" of corporate reorganizations under title 11 of the United States Code (the "Bankruptcy Code"), which occurred during the 1990s as a result of the migration of Chapter 11 cases of large enterprises from other venues to Delaware, has provoked a stream of academic articles debating the consequences of Delaware's emergence. Armed with statistics purporting to demonstrate a high rate of recidivism …

The Effect Of Bankruptcy Upon A Firm Using Patents And Trademarks As Collateral, Lois R. Lupica

Faculty Publications

The Bankruptcy Code sets forth an orderly process for the distribution of a debtor-in-bankruptcy's assets. This process has the effect of altering many of the procedural and substantive rights and obligations of the debtor, as well as of the debtor's creditors. Parties asserting a property interest in assets of a debtor in bankruptcy, however, must rely on nonbankruptcy law to determine the nature and extent of their property interests. The most commonly asserted interest by creditors involved in a bankruptcy are security interests.

Why Warn? – The Worker Adjustment And Retraining Notification Act In Bankruptcy, Laura B. Bartell

Law Faculty Research Publications

The Worker Adjustment and Retraining Notification ("WARN") Ace was enacted by Congress in 1988 to provide limited protections to workers whose jobs are suddenly and permanently terminated. The WARN Act generally precludes an "employer" from ordering a "plant closing or mass layoff" until the expiration of a sixty-day period after giving written notice of such proposed action. Pursuant to legislative directive, the Department of Labor ("Department") promulgated a final rule in 1989 interpreting the provisions of the statutory language. Although neither the WARN Act itself nor the final rule makes any reference to bankrupt employers, in the preamble to the …

Why Are Delaware And New York Bankruptcy Reorganizations Failing?, Lynn M. Lopucki, Joseph W. Doherty

UF Law Faculty Publications

Why are Delaware and New York Bankruptcy Reorganizations Failing?

"Retail Choice" Is Coming: Have You Hugged Your Utilities Lawyer Today? (Part Ii), Nancy B. Rapoport, Jeffrey D. Van Niel

Scholarly Works

This part of the article provides a discussion on the intersection of utilities law and bankruptcy law, pre-BAPCPA. (Part I provides a primer on the history of utilities regulation.)

"Retail Choice" Is Coming: Have You Hugged Your Utilities Lawyer Today? (Part I), Nancy B. Rapoport, Jeffrey D. Van Niel

Scholarly Works

This part of the article provides a primer on the history of utilities regulation. (Part II provides a discussion on the intersection of utilities law and bankruptcy law, pre-BAPCPA.)

Multidisciplinary Practice After In Re Enron: Should The Debate On Mdp Change At All?, Nancy B. Rapoport

Scholarly Works

No abstract provided.

Revised Article 9, The Proposed Bankruptcy Code Amendments And Securitizing Debtors And Their Creditors, Lois R. Lupica

Faculty Publications

The new provisions in Revised Article 9 both reflects the drafters’ decision to enhance secured creditors’ rights, but also includes myriad provisions designed to facilitate securitization transactions. Because bankruptcy law looks to state law (specifically Article 9) to determine the rights of creditors and transferees with respect to personal property, changes to Article 9 are in effect, changes to bankruptcy law. The question raised by the changes to Article 9 is whether these changes are consistent with our historical understanding of bankruptcy policy.

Delaware Is Not A State: Are We Witnessing Jurisdictional Competition In Bankruptcy, G. Marcus Cole

Journal Articles

Over the last twelve years, the United States District Court for the District of Delaware has experienced exponential growth in the number of bankruptcy filings for large corporate debtors. This relatively recent rise in Delaware bankruptcy venue cannot, on its face, be explained by Delaware's eighty-five-year preeminence in the race for corporate charters, since the advantages most often postulated for Delaware's dominance in corporate law do not carry over to corporate bankruptcy. The state has limited influence over federal bankruptcy law and virtually no control over the selection of federal bankruptcy judges.

This rise of Delaware bankruptcy venue, or Delawarization …

Limiting Liability Through Bankruptcy, G. Marcus Cole

Journal Articles

The purpose of this Article is to expose that function of bankruptcy law that distinguished it from English and Colonial insolvency law, and to determine the scope of and need for bankruptcy law to perform that function in contemporary society. I posit that the distinguishing character of bankruptcy law was, and continues to be, its ability to serve as a temporal asset partitioning device. By asset partition, I mean the ability of a structure to sequester the assets of an owner of an enterprise from the reach of the creditors of that enterprise, or the assets of the enterprise from …

Will Big Tobacco Seek Bankruptcy Protection? A $145 Billion Verdict Poses The Question, Mark Gottlieb, Richard A. Daynard

William & Mary Environmental Law and Policy Review

No abstract provided.

Collecting Debts From The Ill And Injured: The Rhetorical Significance, But Practical Irrelevance, Of Culpability And Ability To Pay, Melissa B. Jacoby

American University Law Review

No abstract provided.

Bankruptcy, Just For The Rich? An Analysis Of Popular Fee Arrangements For Pre-Petition Legal Fees And A Call To Amend, Kerry H. Ducey

Vanderbilt Law Review

The scenario is typical. An individual sits amid a pile of overdue bills. He calculates and recalculates only to verify what he has already suspected-his debt far exceeds his monthly income. Meanwhile, creditors and collection agencies demand payment while threatening repossession and other legal action. With no ready source of additional income, the debtor ultimately decides to file for bankruptcy. He consults an attorney, and the two agree to file a consumer no-asset Chapter 7 bankruptcy petition.' The lawyer then promises to use her best efforts to secure relief for the debtor. All she needs is a retainer. A retainer? …

Crumbs For Oliver Twist: Resolving The Conflict Between Tax And Support Claims In Bankruptcy, Michelle A. Cecil

Faculty Publications

This article is premised on the assumption that the congressional goal of preferring support claims over federal income tax claims is indeed a laudable one, based on three interrelated policy justifications. First, support claimants are unable to spread their risk of loss like the government is able to do by raising tax rates or increasing tax revenue from other sources. As three prominent bankruptcy scholars noted in their recent study of consumer bankruptcy entitled The Fragile Middle Class: Americans in Debt:

The Failure Of Public Company Bankruptcies In Delaware And New York: Empirical Evidence Of A "Race To The Bottom", Lynn M. Lopucki, Sara D. Kalin

Vanderbilt Law Review

Commentators sometimes recognize Delaware's preeminence in corporate law, but they almost invariably treat Delaware's recent popularity as a bankruptcy venue choice as raising entirely different issues. In fact, the two are integrally related. Specifically, just as the efforts of Delaware and other states to attract corporations--a process often referred to as "charter competition'-has induced Delaware to regulate corporate law in a generally efficient manner, the same forces will have a beneficial effect on Delaware's bankruptcy judges

. -Professor David Skeet'

Whither The Race? A Comment On The Effects Of The Delawarization Of Corporate Reorganizations, Randall Thomas, Robert K. Rasmussen

Vanderbilt Law School Faculty Publications

Recent empirical work has demonstrated that large, publicly held firms tend to file for bankruptcy in Delaware. In our previous work, we have documented this trend, and argued that it may be efficient for prepackaged bankruptcies, while it unclear if it is efficient for traditional Chapter 11 cases. In this piece, we respond to LoPucki and Kalin's assertion that Delaware bankruptcy court performs worse than others. They base this claim on the observation that firms that file for bankruptcy in Delaware are more likely to file for bankruptcy a second time than are firms that file in another jurisdiction. We …

Is International Bankruptcy Possible?, Frederick Tung

Michigan Journal of International Law

Although international business firms proliferate, there is no international bankruptcy system. Instead, bankruptcy law remains a matter for individual states. The failure of a multinational firm therefore raises difficult questions of conflict and cooperation among national bankruptcy laws. In the discourse over the appropriate design for an international bankruptcy system, universalism has long held sway as the dominant idea, embraced nearly universally by bankruptcy scholars. Universalism offers a simple and elegant blueprint for international bankruptcy. Under universalism, the bankruptcy regime of the debtor firm's home country would govern worldwide, enjoying global reach to treat all of the debtor's assets and …

The Failure Of Public Company Bankruptcies In Delaware And New York: Empirical Evidence Of A "Race To The Bottom", Lynn M. Lopucki, Sara D. Kalin

UF Law Faculty Publications

In the early 1990s, Delaware replaced New York as the jurisdiction of choice for the bankruptcy reorganization of large, public companies. In an empirical study of 188 companies emerging from bankruptcy reorganization from 1983 through 1996, the authors found that the refiling rates for public companies reorganized in Delaware and New York were about five to seven times the refiling rates for companies reorganized in other courts. Nine of the thirty large, public companies emerging in Delaware from 1991 to 1996 (30%) have already refiled. New York rates were higher during the period of New York's dominance than during the …