Bankruptcy Law Commons^™

Understanding The Big Three’S Wavering Support Of Environmental And Social Shareholder Proposals, Jeff Schwartz, Jefferson Jensen

Seattle University Law Review

Because of their substantial equity portfolios, BlackRock, Vanguard, and State Street (the Big 3) are central players in corporate governance. It is, therefore, critical to understand how they vote. One puzzle is that their support for shareholder proposals on environmental and social matters appears to waiver. In 2020, for instance, BlackRock supported 11.1% of environmental proposals at S&P 500 firms. In 2021, it seemingly reversed course, supporting 55.2%. It then flipped again, supporting 32.1% in 2022. Such statistics suggest that the Big 3 are constantly changing their views on these topics. This Article seeks to better understand whether this is …

Volume 48 Masthead, Seattle University Law Review

Seattle University Law Review

Volume 48 Masthead

Creditors, Shareholders, And Losers In Between: A Failed Regulatory Experiment, Albert H. Choi, Jeffery Zhang

Articles

In the aftermath of the 2007–08 Global Financial Crisis, regulators encouraged many of the world’s largest banks to hold a new type of regulatory instrument with the goal of improving their safety and soundness. The regulatory instrument was known as a “CoCo,” short for contingent convertible bond. CoCos are neither debt nor equity. They are something in between, designed to give the bank a shot in the arm during times of stress. Many of the largest international banks have issued CoCos worth hundreds of billions of dollars. After more than ten years—a decade that includes the collapse of Credit Suisse …

The Credit Markets Go Dark, Jared A. Ellias, Elisabeth De Fontenay

Faculty Scholarship

Over the past generation, conflicting trends have reshaped the ownership of corporate equity on the one hand and corporate debt on the other. In equity, the two great trends have been the shift from public markets to private ownership and the consolidation of American companies’ stock in the hands of powerful investment funds. In debt, by contrast, the great trends have been a shift from private loans to quasi-public markets and dispersed ownership.

In this Article, we chronicle the recent and dramatic reversal of these trends in the debt markets. Private investment funds executing a “private credit” strategy have become …

Bankruptcy Appeal Barriers, Jonathan M. Seymour

Faculty Scholarship

Appeals in bankruptcy do not look like appeals elsewhere in the federal court system. In particular, bankruptcy appeal barriers are strikingly distinctive. These barriers serve outright to block an appeal from being decided. An appellate court may dismiss an appeal, rather than consider the merits, if facts on the ground have changed so much since the original decision that providing a remedy to an appellant, even if victorious, would not be prudent. Take ongoing litigation in the Boy Scouts bankruptcy case. A plan of reorganization was confirmed fixing the entitlements of victims to compensation. Dissenting creditors argued bitterly the plan …

Green Dividends: A Case Study In Green Dividends And The Conditions For Private Ordering Solutions, Anne M. Tucker

Seattle University Law Review

This Essay introduces a novel private ordering solution to facilitate corporate investments in pro-social and environmental initiatives: Green dividends. Green dividends are an optional increase in shareholder dividends that are returned to the company to be reinvested in environmental initiatives or kept by a shareholder.

Green dividends pose an alternative to the current gridlocked debate that corporations can’t, won’t, shouldn’t, and shouldn’t even try to act in pro-social or environmental ways. Turning the common refrains on their head converts each narrative into an element for a successful private ordering solution: authority, accountability, shareholder buy-in, and government- backed enforcement. With Green …

Does Climate Disclosure Work To Reduce Greenhouse Gas Emissions? Emerging Evidence Suggests Cautious Optimism, Cynthia A. Williams

Seattle University Law Review

Significant regulatory resources have been spent developing global, voluntary climate and sustainability disclosure standards, such as the TCFD, TNRD, and ISSB’s Sustainability and Climate Disclosure standards, or domestically required disclosures, such as in the EU and in the U.S. Thus, it is important to evaluate whether this disclosure, particularly voluntary, qualitative disclosure, will have the power to shift the allocation of capital, will have a significant effect on the management of climate risk within firms, and ultimately will reduce climate change risk and biodiversity loss.

In this Article, several interrelated questions will be discussed. First, what does the empirical evidence …

Volume 48 Masthead, Seattle University Law Review

Seattle University Law Review

Volume 48 Masthead

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 …

No Harm, No Foul? The Recent Trend Of Super Speed Chapter 11 Bankruptcy, Isabella Leblanc

Emory Bankruptcy Developments Journal

Super speed chapter 11 bankruptcies have become a popular option for debtors seeking a quick restructuring process. Since In re Bluebird in 2006, courts have allowed debtors to complete a chapter 11 restructuring in record time, sometimes in less than a day. Such bankruptcies afford the debtor speed when the traditional chapter 11 timeline would effectively push the debtor into liquidation. In early super speed chapter 11 cases, the courts used the equity powers in section 105(a) of the Bankruptcy Code to analyze whether the circumstances warranted such speed. However, since 2016, courts have improperly asserted that the super speed …

Ethics & Independence In Trump’S War On Big Law, Christopher D. Hampson, Elise Bernlohr Maizel

UF Law Faculty Publications

In his second term, President Donald Trump has launched an unprecedented assault on the nation's largest law firms. Through a series of executive orders and highly unusual EEOC (Equal Employment Opportunity Commission) actions, the Trump regime has sought to undermine the independence of the private bar. In response, targeted firms have been forced to make a choice: to appease the administration or to fight back. This Essay considers those choices the interrelated nature of parallel settlements and suits-and the choice that the majority of firms have made to stay silent. We argue that Big Law's independence is essential and that …

False Venue Claims Signed Under Penalty Of Perjury, Lynn M. Lopucki

UF Law Faculty Publications

In a study of venue for the one hundred ninety-five large, public company bankruptcies filed from 2012 through 2021, I discovered nine cases (5 percent) in which the companies’ venue claims were in apparent conflict with what the debtors themselves stated on their petitions to be the locations of the companies’ principal places of business and principal assets. Nor were the venue claims justified by domicile. Eight of the nine proceeded to confirmation in an improper venue.

Although it is routine for large, public companies and the courts in which they file to ignore the Bankruptcy Code and Rules, these …

Mission Creep Or Mission Failure? A Review Of Melissa Jacoby's Unjust Debts, Christopher D. Hampson

UF Law Faculty Publications

No abstract provided.

The Bankruptcy Off-Ramp From Complex Civil Litigation: Purdue Pharma, Opioids, And Unorthodox Civil Procedure In Public Harms Cases, Abbe R. Gluck

Indiana Law Journal

For civil procedure scholars, bankruptcy has become exciting. Last year, the United States Supreme Court decided for the first time a case that implicated both the core of the national opioids litigation and one of the most important developments in modern civil procedure—namely, the enormous amount of unorthodox procedural innovation that is happening in the courts as parties strive to reach global settlement.

The decision, Harrington v. Purdue L.P., took almost seven months despite the grant of expedited review—an indication that the result was likely not easily reached. In June 2024, the Court, voting five to four, reversed the Second …

Alternatives To Delaware? Evaluating Corporate Law In Nevada, Texas, And Wyoming, Joseph Landau, Bailey Swartz, Anthony Rickey, Robert Ragazzo, Benjamin Edwards, George A. Mocsary

Fordham Journal of Corporate & Financial Law

No abstract provided.

Consider This: Make-Whole Premiums As Unmatured Interest, Kathryn G. Berman

Fordham Law Review

Make-whole premiums have become mainstream in corporate bond indentures because of the protections they provide to lenders. Although they are generally enforceable as a matter of contract law, make-whole premiums have been treated inconsistently in bankruptcy courts in several areas. One point of inconsistency is whether make-whole premiums are treated as liquidated damages or unmatured interest. Such a determination has significant implications on the allowance of the claim and its recovery from an insolvent debtor.

Most bankruptcy courts have treated make-whole premiums as liquidated damages and allowed their recovery in creditors’ claims. In doing so, their analyses have treated liquidated …

Bankruptcy Appeal Barriers, Jonathan M. Seymour

Washington and Lee Law Review

Appeals in bankruptcy do not look like appeals elsewhere in the federal court system. In particular, bankruptcy appeal barriers are strikingly distinctive. These barriers serve outright to block an appeal from being decided. An appellate court may dismiss an appeal, rather than consider the merits, if facts on the ground have changed so much since the original decision that providing a remedy to an appellant, even if victorious, would not be prudent. Take ongoing litigation in the Boy Scouts bankruptcy case. A plan of reorganization was confirmed fixing the entitlements of victims to compensation. Dissenting creditors argued bitterly the plan …

Assessing The Post-Purdue Landscape Of Consensual Third-Party Releases Through Contract Law, Kaori Nagase

American University Law Review

In Harrington v. Purdue Pharma L.P., the Supreme Court invalidated non-consensual third-party releases in Chapter 11 bankruptcy plans. In doing so, however, the Court left open the question of what constitutes valid consent to a release. This Comment argues that lower courts must now require a higher threshold of affirmative consent—particularly in mass-tort bankruptcies involving highly culpable non-debtors. In light of Purdue’s implication that third-party releases are anchored in contract law principles, this Comment suggests that courts should evaluate what constitutes adequate consideration for a release.

The End(S) Of Bankruptcy Exceptionalism: Purdue Pharma And The Problem Of Social Debt, Pamela Foohey, Jonathan C. Lipson

Scholarly Works

The Supreme Court’s recent 5-4 decision in the controversial chapter 11 bankruptcy reorganization of opioid-maker Purdue Pharma ends the use of nonconsensual third-party “releases,” which discharge (eliminate) liabilities of non-debtors who may share liability with a corporate debtor. Although the majority opinion is correct that the Bankruptcy Code does not permit this, it failed to recognize the problematic exceptionalism of the lower courts which approved those releases or the “social” qualities of Purdue Pharma’s mass tort liability.

Bankruptcy exceptionalism has been a contested concept since it emerged over fifteen years ago, and reflects a willingness to bend the rule of …

Strategies For Unsecured Creditors To Mitigate The Pro-Debtor Policies Of Subchapter V And Suggestions For Changes To The Bankruptcy Code, Micah Mays

Oklahoma Law Review

No abstract provided.

Controlling The Mischief Of New York’S Foreclosure Abuse Prevention Act Through Constitutional Pre-Emption, Shelby D. Green

Elisabeth Haub School of Law Faculty Publications

FAPA aimed to ease the burdens of long-delayed foreclosure proceedings by restating the operation of the statute of limitations. It contains provisions across several sections of state statutes that specify that once the six year statute of limitations on actions to foreclose commences, typically by the acceleration of the balance due on the promissory note and commencement of suit, it continues to run, even after the parties have entered into a workout agreement and have dismissed the complaint. By express terms, the Act had immediate effect, such that those lenders who withdrew complaints pursuant to a workout agreement before the …

Discharging Government Debt, Nicole Langston

Vanderbilt Law Review

The bankruptcy system tries to strike a balance between a fresh economic start through debt forgiveness, or discharge, and the need to repay creditors. When the debt is owed to the government, however, the scale seemingly tips toward repayment because of the government’s role in providing essential services to society. But there are certain debts owed to the government that can be forgiven in bankruptcy and some that cannot. The consumer bankruptcy system does not forgive government-owed child support debt, penal debt, and student loan debt, which are disproportionally carried by poor women and racial minorities, but the system does …

Lambat Asal Selamat: The Slow But Safe Twenty-Five Year Recalibration Of Personal Bankruptcy In Malaysia, Jason J. Kilborn

South Carolina Journal of International Law and Business

A popular Malay proverb advises, “[L]et it be slow, as long as it is safe” (biar lambat asal[kan] selamat),1 combining the sentiments of two similar English proverbs: “haste makes waste,” and “slow and steady wins the race.” These principles certainly seem to have guided Malaysian lawmakers in the quarter-century, multistage development of the most important element of modern bankruptcy law: the discharge. Adopted in 1967,2 Malaysian bankruptcy law has long included a very limited debt discharge, but as it left more and more economically debilitated debtors in perpetual bankruptcy limbo, policymakers became dissatisfied with leaving a huge and growing mass …

Opening Remarks, Douglas J. Whaley

Emory Bankruptcy Developments Journal

No abstract provided.

Acceptance Remarks For The 2025 Distinguished Service Award For Lifetime Achievement, Jay Lawrence Westbrook

Emory Bankruptcy Developments Journal

No abstract provided.

The Nightmare Loophole: Circumventing Section 365(N) And Erasing A Non-Debtor Licensee’S Intellectual Property Rights, Grant Marshall

Emory Bankruptcy Developments Journal

In today’s knowledge-driven economy, the significance of intellectual property licenses cannot be overstated. Nevertheless, a loophole within the Bankruptcy Code allows a non-debtor’s license agreement to be erased, stripping them of their right to utilize the intellectual property without any avenue for recourse. Selling intellectual property “free and clear” of encumbrances before the debtor rejects the license agreement could deprive the non-debtor licensee of the opportunity to continue using the intellectual property. This loophole not only undermines the policy goals of both intellectual property and bankruptcy, but also subverts the clear intentions of Congress and the Supreme Court to protect …

Climate Adaptation And Bankruptcy: Preparing Utilities For What Is To Come, Hayley Roy

Emory Bankruptcy Developments Journal

Climate change is an existential crisis that has and will continue to impact every aspect of our daily lives. An overlooked component of life in the United States, except in times of crisis, is our energy grid, which will continuously feel the consequences of climate change. Electricity is a basic necessity for most people in the U.S., but it is underprepared for the realities of climate change. Climate adaptation is a necessary step forward that energy utilities must take to ensure the resilience and reliability of electricity. Failure to adequately adapt will lead to dangerous situations as seen in the …

Testing The Waters: Expanding Chapter 9 Bankruptcy To Encourage Treatment Of Chemically Contaminated Drinking Water, Alexandra Zimmer

Emory Bankruptcy Developments Journal

Chemical contamination of drinking water supplies has become a significant issue across the globe with serious health and safety impacts. While the true extent of the impact is still being determined, costs associated with remediation efforts to clean up are astonishing. Municipalities, in particular cities, towns, and counties, suffer significant damages both through costs incurred directly for treatment of chemically contaminated drinking water supplies and through lost revenues resulting from municipal residents’ exposure.

This Comment argues Congress should expand municipal access to filing for bankruptcy under chapter 9 of the Bankruptcy Code to encourage local government efforts to clean up …

A Commitment Rule For Insolvency Forum: A Response To Critics, Anthony J. Casey, Aurelio Gurrea-Martinez, Robert K. Rasmussen

Emory Bankruptcy Developments Journal

No abstract provided.

Party Commitment And Flexibility In Corporate Restructuring, Robert K. Rasmussen

Emory Bankruptcy Developments Journal

No abstract provided.