Commercial Law Commons^™

Predatory Structured Finance, Christopher L. Peterson

ExpressO

Predatory lending is a real, pervasive, and destructive problem as demonstrated by record settlements, jury awards, media exposes, and a large body of empirical scholarship. Currently the national debate over predatory mortgage lending is shifting to the controversial question of who should bear liability for predatory lending practices. In today’s subprime mortgage market, originators and brokers quickly assign home loans through a complex and opaque series of transactions involving as many as a dozen different strategically organized companies. Loans are typically transferred into large pools, and then income from those loans is “structured” to appeal to different types of investors. …

Finding Nemo: Rediscovering The Virtues Of Negotiability In The Wake Of Enron, Adam J. Levitin

ExpressO

Creditors have long understood that any claims they submit for repayment in a bankruptcy might be valid, but subject to subordination in the order of payment of the bankruptcy estate’s limited funds if the creditor behaved inequitably as the debtor failed. A groundbreaking opinion in Enron’s on-going bankruptcy has expanded the practice of equitable subordination far beyond its traditional reach. According to the court, buyers of bankruptcy claims are now subject to subordination, not just for their own conduct, but also for conduct of previous owners of the claims, regardless of whether the conduct related to the claims.

In a …

What Makes Asset Securitization "Inefficient"?, Kenji Yamazaki

ExpressO

Despite the damage caused by the recent Enron scandal , the asset securitization market has been vibrant and has become a popular financing alternative . A number of academics emphasize its merits and suggest that it is a more favorable way of financing, and Congress’s proposal to make sales of asset in securitization immune from characterization as secured transactions under the Bankruptcy Reform Act of 2001 (the “Reform Act”) almost materialized when the Enron scandal hit the scene. Conversely, there have been accusations that securitization is not a legitimate way of financing because, for example, it fosters fraudulent transactions.

Why …

Patterns In A Complex System: An Empirical Study Of Valuation In Business Bankruptcy Cases, Bernard Trujillo

ExpressO

This Article applies complex systems research methods to explore the characteristics of the bankruptcy legal system, presenting the results of an empirical study of twenty years of bankruptcy court valuation doctrine in business cramdown cases. These data provide solid descriptions of how courts exercise their discretion in valuing firms and assets.

This Article accomplishes two objectives: First, using scientific methodology, this Article explains the content of bankruptcy valuation doctrine. Second, this Article uses doctrine as a variable to explore system dynamics that govern the processes of change over time.

Significant findings include (i) courts tend to “split the difference” in …

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

Articles

No abstract provided.

"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.)

Bankruptcy Reorganization: Legal Dynamics Associated With Economic Discontinuity, Young Rock Noh

LLM Theses and Essays

This thesis attempts to discover the factors leading to such failures and to propose a cure. It argues that the basic structure of Chapter 11 of the Code, the debtor in possession structure, is one of the essential factors causing such a high rate of failure. The thesis further asserts that it is possible to reduce the rate of unsuccessful reorganization if the bankruptcy court exercises its power of case management more actively and expeditiously. For example, the court can screen the debtors' filing for relief before the reorganization case proceeds too far. Chapter II of this thesis examines the …

Commercial Arbitration In The U.S.: The Arbitrability Of Disputes Arising From Statute-Based Claims, Sylvie Frankignoul

LLM Theses and Essays

A leading contemporary expert in arbitration has explained: "The concept of arbitrability determines the point at which the experience of contractual freedom ends and the public mission of adjudication begins. In effect, it establishes a dividing line between the transactional pursuit of private rights and courts' role as custodians and interpreters of the public interest." 1 A major part of the arbitrability doctrine deals with the kind of claims that can fall within the scope of agreements for private dispute resolution. Arbitration clauses are an integral part of the parties' transactions. Nevertheless, the American judiciary historically has refused to enforce …

Derivatives And Risk Framework, Ravichandra Vasant Kini

LLM Theses and Essays

The purpose of this thesis is to explore the dynamics of the fast-growing international financial markets and to study in particular the risks associated with the different kinds of financial instruments. The Barrings Bank Crisis, Proctor and Gamble, Gibson Greetings cases against Bankers Trust, and the Orange County Bankruptcy has prompted regulatory authorities to focus on the risks involved in the derivatives markets. In this paper, the first chapter explains the basic working of the different kinds of derivative instruments especially concentrating on Swaps, Futures, and Options. The second chapter goes on to explain, the risks involved in the uses …

Harvey's Silence (Symposium: Letters To The Commission), James J. White

Articles

Harvey Miller has a reputation as a leading bankruptcy lawyer, and he deserves it. As his criticism shows, he understands why and how the Code changed the Act in 1978 and how the drafters of Chapter 11 erred. Better than all but a handful of other lawyers, Harvey Miller knows how to manipulate Chapter 11 to serve his clients' interests. He understands both the legal and practical intricacies of Chapter 11. Were I the CEO of a large and troubled company, I would hire Harvey Miller and gladly pay him twice what most other bankruptcy lawyers would charge. In short, …

Wysko Investment Company V. Great American Bank: A New Attack On The Usefulness Of Letters Of Credit, Robert Jay Gavigan

Northwestern Journal of International Law & Business

The letter of credit has long been accepted as a valuable instrument of assured payment in international business. In Wysko Investment v. Great American Bank, however, an Arizona district court jeopardized the usefulness of the letter of credit transaction by enjoining payment to the beneficiary after the issuing party became insolvent.' This note addresses the issue of whether a bankruptcy court has the power to enjoin payment of a letter of credit issued by the debtor's principal, pursuant to 11 U.S.C. § 105(a), when the court finds the injunction necessary for the debtor's reorganization. Further, this note examines whether such …

Revising Article 9 To Reduce Wasteful Litigation, James J. White

Articles

For reasons that are unclear to me, the committees reviewing the articles of the Uniform Commercial Code and drafting revisions are congenitally conservative. Perhaps these committees take their charge too seriously, namely, to revise, not to revolutionize. Perhaps their intimate knowledge of the subject matter exaggerates the importance of each section and consequently magnifies the apparent size of every change. In any case, my own experience with two such committees tells me that the members quickly become focused on revisions and amendments that any outsider would describe as modest. To the extent that the revision of any of the articles …

Claims And Control In Chapter 11 Cases: A Call For Neutrality, Herbert P. Minkel Jr., Cynthia A. Baker

Cardozo Law Review

No abstract provided.

Developments In Trading Claims And Taking Control Of Corporations In Chapter 11, Chaim J. Fortgang, Thomas Moers Mayer

Cardozo Law Review

No abstract provided.

Substantive Consolidation In Bankruptcy: A Primer, J. Stephen Gilbert

Vanderbilt Law Review

Substantive consolidation is a powerful vehicle in bankruptcy by which the assets and liabilities of one or more entities are combined and treated for bankruptcy purposes as belonging to a single enterprise.Because substantive consolidation vitally affects the rights and interests of parties involved in bankruptcy proceedings, it is termed a matter"pregnant with consequence"' and should be used with caution. Substantive consolidation is not a common occurrence because it exacts strict requirements in order to protect the parties that it affects. Be-cause substantive consolidation lacks clear statutory guidance, however,courts examine the facts of each case closely to ascertain whether consolidation is …

The Malformed Mouse Meets The Libr: Secured And Restitutionary Claims To Commingled Funds, Harold R. Weinberg

Law Faculty Scholarly Articles

The "malformed mouse" is section 9-306(4)(d) of the Uniform Commercial Code. It provides a formula that determines the extent to which an insolvent debtor's commingled bank account contains funds subject to a security interest. A special entitlement is necessary because it is impossible to physically distinguish this collateral after commingling. The label malformed mouse is appropriate if one agrees with critics who have questioned the mouse's statutory architecture and underlying rationale. The image of an elusive creature is also apt. The mouse continues to elude understanding, although it has been part of the Code for many years and the subject …

The Risks Of Insider Guaranties, Douglass G. Boshkoff

Articles by Maurer Faculty

Loan payments made within a year of a bankruptcy filing could be considered avoidable preferences if the loan were guaranteed by a corporate insider. In this article, Prof Boshkoff argues that bankers should value insider guaranties only as a second source of payment, not for any subtle pressure they may exert on the borrower.

Intragroup (Upstream, Cross-Stream, And Downstream) Guaranties Under The Uniform Fraudulent Transfer Act, Phillip I. Blumberg

Cardozo Law Review

No abstract provided.

Involuntary Fraudulent Transfers, Frank R. Kennedy

Cardozo Law Review

No abstract provided.

Buyer Status Under The U.C.C: A Suggested Temporal Definition, David Frisch

Law Faculty Publications

This Article attempts two different but complementary tasks. First, it offers an answer to the "by no means academic question" asked above. In so doing, the Article considers Code rules that affect the buyer-seller relationship and those that impact on the interests of third parties. The conclusion reached is that buyer status occurs at the moment the purchaser obtains the remedial right to the goods vis-a-vis the seller. In most instances, therefore, buyer status will inevitably coincide with the moment the remedy of specific performance or, in some cases, replevin becomes available to the buyer. The Article's second purpose is …

Timing Of Payments By Check Under Section 547 Of The Bankruptcy Code, Azita Gorton

Cardozo Law Review

No abstract provided.

Standby Letters Of Credit And Fraud (Is The Standby Only Another Invention Of The Goldsmiths In Lombard Street?), John F. Dolan

Cardozo Law Review

No abstract provided.

Efficiency Justifications For Personal Property Security, James J. White

Articles

In February of 1983 Pan American World Airways issued 100 million dollars of convertible secured notes. As security for these notes it put up three Boeing 747 SP aircraft, two 747-100 aircraft, and one McDonnell Douglas DC10-30. The appraised value of these aircraft was 157 million dollars. To the extent possible under the law, Pan American made these aircraft subject to the claims of the owners of the new notes. On default, the note holders would have the first claim on these aircraft, would have the right to repossess them outside of bankruptcy, and would have the right to the …

Judicial Lien Priorities Under Article 9 Of The Uniform Commercial Code: Part I, David G. Carlson, Paul M. Shupack

Cardozo Law Review

No abstract provided.

The Recent Erosion Of The Secured Creditor's Rights Through Cases, Rules And Statutory Changes In Bankruptcy Law, James J. White

Articles

One can view the law of creditors' rights as a series of cyclesin which alternatively the rights of the creditor and then those of the debtor are in ascendancy. Looking back through Americanlegislative history, one sees both the state legislatures and the Congress intervening on behalf of debtors in a variety of ways onmany occasions. An early example of such intervention was the enactment, particularly in the Midwest and West, of generous exemption laws that removed a variety of property beyond the reach of general creditors. A second example is the enactment of usury laws, which continue to be a …

Article 9 Security Interests As Voidable Preferences: Part Ii The Floating Lien, Irving A. Breitowitz

Cardozo Law Review

No abstract provided.

Secured Transactions - What Floats Can Be Sunk, Jack B. Justice

Villanova Law Review (1956 - )

No abstract provided.

Recent Developments, Various Editors

Villanova Law Review (1956 - )

No abstract provided.

Case Comments--International Law--Corporations--State Denied Standing To Sue For Injury, Journal Staff

Vanderbilt Journal of Transnational Law

The Barcelona Traction, Light and Power Company, Ltd.,(hereinafter referred to as Barcelona Traction) was incorporated under Canadian law in 1911 with its main office in Toronto. Several subsidiaries were formed, all under Canadian law, to develop, produce, and distribute electric power in the vicinity of Catalonia, Spain. To finance these operations, the company issued both peseta and sterling bonds, the shares in some of the subsidiaries providing security to a Canadian bank for the sterling bonds. Revenue produced by the subsidiaries from their operations in Spain was used to service the bond interest. Servicing was suspended for the duration of …