Bankruptcy Law Commons^™

The Bankruptcy Code's Missing Link: How The Undefined "Executory Contract" Quandary Is Leaving Land Sales And Bankruptcy Courts In Limbo, Abby Ponder

Northern Illinois University Law Review

Arguably the most convoluted concept lurking within bankruptcy law is that of the "executory contract" which may be found within section 365 of the bankruptcy code. Since its inception in 1978, this section has been dubbed one of the most "psychedelic" areas of American jurisprudence. The phantasmagoric nature of this section largely derives from Congress declining to provide a definition within the Code for executory contracts. Already rife with confusion and contradiction, the missing definition of executory contract, which comes under section 365, represents a significant "missing link" of understanding for bankruptcy courts in ruling on land sale contracts. Bankruptcy …

The Digitalization Of Insolvency Proceedings, Aurelio Gurrea-Martinez

Research Collection Yong Pung How School Of Law

Despite the international divergences existing in the design of insolvency law, there is a common feature of insolvency proceedings that, to a greater or lesser extent, is somehow universal: insolvency proceedings are generally costly and lengthy processes. For that reason, it is not surprising that a significant body of the literature on insolvency law deals with different mechanisms to make insolvency proceedings more efficient. This article examines how technology can contribute to that goal. To that end, it starts by reviewing how countries are deploying, or can deploy, technology in different aspects and stages of insolvency proceedings and how such …

Do Bankruptcy Judges Belong In Chambers? Rethinking Inherent Civil Contempt Power In Bankruptcy, Abigail B. Willie

Faculty Articles

The bankruptcy court is the face of the federal judiciary to much of the American public. Almost as many cases are filed in bankruptcy courts every year as are filed in the federal district courts and circuit courts combined. And in each bankruptcy case, there are often dozens or more affected parties. As such, it is critical that the public has confidence in the role of the bankruptcy court and its judges. Yet, since the creation of the Bankruptcy Code in 1978, the non-Article III bankruptcy system has faced seemingly never-ending challenges to subject matter jurisdiction in the bankruptcy context …

Mass Tort Bankruptcy Goes Public, William Organek

Vanderbilt Law Review

Large companies like 3M, Johnson & Johnson, Purdue Pharma, and others have increasingly, and controversially, turned from multidistrict litigation to bankruptcy to resolve their mass tort liability. While corporate attraction to bankruptcy’s unique features partially explains this evolution, this Article reveals an underexamined driver of this trend and its startling results: government intervention. Governments increasingly intervene in high-profile bankruptcies, forcing firms into insolvency and dictating the outcomes in their bankruptcy cases. Using several case studies, this Article demonstrates why bankruptcy law should subject such governmental actions to greater scrutiny and procedural protections. Governments often assume multiple incompatible roles in these …

The Periphery Of Bankruptcy Law: The Importance Of Non-Bankruptcy Issues In Consumer Bankruptcy, Pamela Foohey

Scholarly Works

One in eleven Americans have filed bankruptcy at some point during their lives. Based on the number of consumer bankruptcy cases initiated during the past several decades, about one million individuals will file every year. This makes bankruptcy courts the leading federal courts with which people have contact. Embedded in people’s cases are a host of legal issues that do not directly implicate bankruptcy law, such as the interpretation of states’ exemptions laws and Article 9 of the Uniform Commercial Code, the avoidance of liens, and defenses to contract claims. Consumer bankruptcy law, via its process, is intertwined with the …

In Re Rs Air, Llc.: Bankruptcy - Alter Ego Theory, Paul Henken

Transactions: The Tennessee Journal of Business Law

No abstract provided.

The Small Business Killer: How Fincen Enforcement Of The Cta Could Destroy The Last Bastion Of The American Dream, Samantha M. Alecozay

Faculty Articles

The Corporate Transparency Act (CTA), passed into law in 2021 and made effective January 1, 2024, mandates the creation of a nationwide database that collects owner information of certain legal entities to help combat money laundering and other illicit financial activities. The CTA requires that the legal entity owners provide necessary information directly to the federal government, rather than relying on state and/or federal government officials to collect the information on their behalf. Further, failure to comply may result in the legal entity and owners incurring significant civil penalties of up to $591 per day of violation and even criminal …

Discharge Discrimination, Nicole Langston

Vanderbilt Law School Faculty Publications

Although the Bankruptcy Code is facially neutral, the consumer bankruptcy discharge provisions produce anomalies that run counter to bankruptcy's internal principles of not forgiving debt that is based on misconduct or that implicates a public policy concern. For example, the discharge provisions allow some individuals to discharge debt that stems from civil rights violations or tortious discrimination. In contrast, the Bankruptcy Code precludes some debtors from debt relief based on narrow views of misconduct or misconceptions about moral hazards. These individuals who file for bankruptcy owe debts that generally cannot be forgiven, like civil and criminal fees and fines and …

The Growth Of Vancouver As An Innovation Hub: Challenges And Opportunities, Camden Hutchison, Li-Wen Lin

All Faculty Publications

This article assesses the development of Vancouver as an entrepreneurial region. Using data collected from commercial startup databases, we find that Vancouver produces more startups and receives more venture capital financing per capita than any other major Canadian city. However, we also find that Vancouver lags many U.S. cities on these same metrics. In light of our empirical findings, we explore whether differences in entrepreneurial activity between Canada and the United States are due to differences in the countries’ legal environments. We conclude that legal differences do not explain observed economic disparities, and that differences in entrepreneurial activity are due …

Loopholes For The Affluent Bankrupt, David R. Hague

Faculty Articles

Recent bankruptcy cases are exposing a problem. Affluent individuals filing for bankruptcy are treated more favorably under the Bankruptcy Code than those debtors with little to no means of financial sustenance or income. Did Congress intend this result? The legislative history is unclear. But one thing seems certain: The United States Bankruptcy Code contains a set of loopholes that appear to be designed for the well-to-do segment of society. Courts throughout the United States are either overlooking these provisions or simply condoning their utilization under the defensible conviction that the Bankruptcy Code permits it.

In this Article, I argue that …

Nipped In The Bud: How Legal Disparities Create Financial Growth Hurdles In The State-Sanctioned Marijuana Industry And Why Bankruptcy Courts Can Provide A Remedy, Caitlyn Cullen

University of Miami Law Review

A new marijuana industry has emerged in the United States in the wake of state-by-state legalization of marijuana, and entrepreneurs, investors, and other advisory services are increasingly viewing the marijuana industry as an area of legitimate business opportunity. However, potential investors have been hesitant to establish formal relationships with marijuana businesses that operate legitimately in the eyes of the state but in a cloud of legal uncertainty at the federal level because the Controlled Substances Act criminalizes marijuana. This Note identifies two economic consequences of the conflicts of state and federal law and suggests a temporary solution that would allow …

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 …

Husky International Electronics, Inc. V. Ritz: Rethinking Actual Fraud, Badges Of Fraud, And Pleading Standards In Federal Bankruptcy Litigation, Meagan George

Maryland Law Review

No abstract provided.

The Cerebral Hercules And The Bankruptcy Hydra: How Judge Schermer Slayed A Multi-Headed Monster While Deep In The Heart Of Texas (And What Any Of This Lone Star State-Grecian Hero Analogy Has To Do With Just A Little Bit Of Yiddish), Charles E. Rendlen Iii, Abigail B. Willie

Faculty Articles

Part I is written from the perspective of Judge Rendlen as a colleague of Judge Schermer and discusses Judge Schermer's contributions as a mediator in the Chapter 11 mega-case of In re U.S. Fidelis, Inc. ("U.S. Fidelis").' Part II is written from the perspective of Mrs. Willie, who has known Judge Schermer as her professional mentor and personal friend for more than a decade, and discusses how the U.S. Fidelis mediation is a reflection of Judge Schermer, the man.

Attorneys' Fees And Chapter Choice: Exploring "No Money Down" Chapter 13 Bankruptcy, Pamela Foohey, Robert M. Lawless, Katherine Porter

Articles by Maurer Faculty

In a forthcoming article in the Southern California Law Review, the authors use new data from the ongoing Consumer Bankruptcy Project (CBP) to explore the "no money down" bankruptcy. This article summarizes that article and discusses the law that influenced the creation of "no money down" chapter 13s, which households are more likely to file with "no money down," and why this type of chapter 13 case might be less than optimal for the consumer bankruptcy system. Both studies draw data from a debtor's bankruptcy court records and written questionnaires mailed to the debtors to collect demographic information and details …

Reexamining The Doctrine Of Equitable Mootness In Light Of The Detroit Bankruptcy, Nicole Langston

Vanderbilt Law School Faculty Publications

Garnering debate, and sometimes harsh criticism, the doctrine of equitable mootness has been a focal point for academic debates among legal scholars for decades. "Unlike the constitutional doctrine of mootness, which bars consideration of appeals because no Article III case or controversy remains, the doctrine of equitable mootness is a pragmatic judicially-created principle, grounded in the notion that, with the passage of time after a judgment in equity and implementation of that judgment, effective relief on appeal becomes impractical, imprudent, and therefore inequitable. Applied principally in bankruptcy proceedings because of the equitable nature of bankruptcy judgments, equitable mootness is often …

Pensions Or Paintings? The Detroit Institute Of Arts From Bankruptcy To Grand Bargain, Maureen B. Collins

University of Miami Business Law Review

This article examines the issues faced by the City of Detroit and the Detroit Institute of Arts when Detroit filed for municipal bankruptcy. Creditors called for the sale of the highly esteemed DIA art collection to pay outstanding municipal pension obligations. The DIA and the Michigan Attorney General viewed the collection not as an asset, but as a charitable public trust. Simply put, the City faced the question of what mattered most – pensions or paintings? Along the way, the parties and courts struggled with valuation of the art collection, a history of judicial decisions and lawmaking regarding charitable trusts …

Chapter 11 Shapeshifters, Lindsey Simon

Scholarly Works

Logic and equity would seem to demand that when administrative agencies are creditors to a bankrupt debtor, they should have the same status as other creditors. But a creditor agency retains its regulatory authority over the debtor, permitting it to continue with agency business such as conducting enforcement proceedings and awarding licenses. As a result, though bankruptcy law and policy both strongly support equal distribution of the estate, administrative agencies have been able to circumvent these goals through the use of “shapeshifting” behaviors. This Article evaluates two dangerous shapeshifting scenarios:

(1) where the agency avoids the limitations of creditor status …

Commodity Futures Trading Commission V. Weintraub, Thomas R. Himmelspach

Akron Law Review

After presenting a general discussion of the attorney-client privilege, this casenote will discuss the facts underlying Weintraub and then review the rationales of the Seventh Circuit and the Supreme Court in their respective holdings. This casenote will discuss other arguments which have been raised in support of the trustee's authority over the privilege. The casenote will conclude with a discussion of other policy and precedent arguments which urge that the trustee should not be given this authority.

The Bankruptcy-Law Safe Harbor For Derivatives: A Path-Dependence Analysis, Steven L. Schwarcz, Ori Sharon

Washington and Lee Law Review

U.S. bankruptcy law grants special rights and immunities to creditors in derivatives transactions, including virtually unlimited enforcement rights. This Article argues that these rights and immunities result from a form of path dependence, a sequence of industry-lobbied legislative step s, each incremental and in turn serving as apparent justification for the next step, without a rigorous and systematic vetting of the consequences. Because the resulting “safe harbor” has not been fully vetted, its significance and utility should not be taken for granted; thus, regulators, legislators, and other policymakers—whether in the United States or abroad—should not automatically assume, based on its …

Preferences Are Public Rights, Brook E. Gotberg

Faculty Publications

In the wake of the Supreme Court’s decision in Stern v. Marshall, there is widespread uncertainty as to what other proceedings may constitutionally fall within a bankruptcy court’s core jurisdiction. Supreme Court jurisprudence has been cryptic regarding the constitutional limitations of non-Article III courts, but the Court has identified a "public rights exception" to the general rule that the judicial power must be exercised only by judges with life tenure and salary protection. This public rights exception has not yet been explicitly extended to a bankruptcy proceeding, but the reasoning of the Court strongly suggests that a trustee’s motion to …

Adjudication Under The Bankruptcy Amendments Of 1984: An Examination Of Congressional Response To The Northern Pipeline Decision, John M. Evans

Journal of the National Association of Administrative Law Judiciary

No abstract provided.

Iflas And Chapter 11: Classical Islamic Law And Modern Bankruptcy, Abed Awad, Robert E. Michael

Elisabeth Haub School of Law Faculty Publications

There is no question that the orderly development of Islamic finance will require finding ways to amalgamate the classical Islamic law of bankruptcy with the needs of the modern Islamic finance industry. The unreasonable reliance on ever-expanding opportunities has disappeared along with the global credit markets. It is therefore inescapable that loss scenarios must be dealt with. That in turn means effective bankruptcy laws. We hope this article will help foster the effort.

Florida's Beefed-Up Assignment For The Benefit Of Creditors As An Alternative To Bankruptcy, Jeffrey Davis

UF Law Faculty Publications

Two new corporate clients have been referred to you. The owners of both corporations have consulted lawyers about their struggling businesses and now seek second opinions. The first was advised by its attorney to file a Chapter 7 bankruptcy petition, the second was advised to file a Chapter 11 petition. You think both should consider an assignment for the benefit of creditors. Why? Stated simply, an assignment for the benefit of creditors, or an ABC, is normally much simpler and almost always less expensive than a comparable bankruptcy proceeding.' The substantial savings in expense results in larger payouts to both …

Randomness And Complexity In Social Explanation: Evidence From Finance And Bankruptcy Law, Bernard Trujillo

Law Faculty Publications

No abstract provided.

Who Tolls The Bells For Firms? Tales From Transition Economies, Katharina Pistor

Faculty Scholarship

Bankruptcy law is regarded as an important mechanism for protecting creditor rights. Much of the current debate about bankruptcy law focuses exclusively on private creditors, ignoring the role of tax authorities as creditor in insolvent firms. Based on data from several transition economies, this essay documents the important, if not dominant, role tax authorities play as initiator of bankruptcy in these countries. While improved tax enforcement is crucial for tackling the problem of tax arrears and hardening the "soft budget-constraint" in former socialist countries, this essay suggests that the presence of the tax authorities as creditor may also affect the …

Corporate Form And Substantive Consolidation, William H. Widen

Articles

No abstract provided.

The Future Of Labor Through The Prism Of Bankruptcy, G. Ray Warner, David L. Gregory

Faculty Publications

(Excerpt)

On Friday, September 28, 2008, St. John's University School of Law was very honored to host "The Future of Labor Through the Prism of Bankruptcy" Symposium. St. John's Institute of Bankruptcy Policy, the American Bankruptcy Institute Law Review, and the Labor Relations and Employment Society at the School of Law co-sponsored this landmark symposium.

Many of the structural changes in contemporary labor-management relationships emanate from the intersections of labor law and bankruptcy law. Many of the nation's major "legacy" industries—including, but not limited to, the unionized auto makers and many airlines—are compelling case studies. Indeed, only a few …

Federalism And Bankruptcy: Deciphering Katz, G. Ray Warner

Faculty Publications

(Excerpt)

A symposium on bankruptcy and state sovereign immunity was held on February 9, 2007 at St. John's University School of Law. Scholarly symposium papers included in this issue of the American Bankruptcy Institute Law Review were prepared by five participants who are experts on issues arising from the intersection of constitutional and bankruptcy law with state sovereign immunity from suits in federal courts. Three of the participating authors, who explore in their articles the theory and history of the jurisprudence of sovereign immunity and the Eleventh Amendment, are outstanding academics who have previously written extensively on this subject—Professor Ralph …

A Few Lines, David G. Epstein

American University Law Review

No abstract provided.