Law and Economics Commons^™

The Equity Dead Zones: Legal Intersectionality Failure Points In Chapter 13 Bankruptcy, Tearria N. Simmons

The Guardianship Journal

Legal intersectionality failure points describe the systemic fractures that occur where overlapping legal, social, and economic inequalities converge, potentially producing compounded barriers to relief. Each failure point marks a site of marginalization. In what ways do individuals already recognized as vulnerable in Chapter 13 bankruptcy face a heightened risk when multiple forms of disadvantage intersect? When these intersections combine in mutually reinforcing ways—racial, economic, and relational disparities colliding with structural deficiencies in family, property, and bankruptcy law—does it result in pronounced negative outcomes, and, if so, what are those outcomes? Within this convergence, could there be a space where compounded …

Corporate Evolution, Omari Scott Simmons

Cardozo Law Review

Political entrepreneurs have declared war on environmental, social, and governance policies ("ESG"), going so far as to attempt to criminalize ESG-influenced investing. They seek a return to some real or imagined past. They amplify and elevate their efforts into mainstream public discourse. They pursue extraordinary goals and tactics to disrupt and even dismantle institutional structures, norms, and established processes. The contemporary anti-ESG backlash is not simply a battle over corporate purpose and the dueling perspectives of shareholder primacy versus stakeholderism or disputes concerning sustainable investment and operational strategies. It reflects aggressive political entrepreneurship and the tension between competing narratives: stasis, …

Debt Tokens, Andrea Tosato, Diane Lourdes Dick, Christopher K. Odinet

Faculty Scholarship

The worlds of crypto and bankruptcy have collided. Once-prominent, fast-growing, and even politically influential platforms for trading cryptocurrencies have imploded spectacularly. Gone are the glossy advertisements, celebrity endorsements, and proclamations that blockchain operates as a law unto itself. Instead, insolvent crypto businesses—including the crypto exchange giant FTX—find themselves in bankruptcy court, no different from any other failed enterprise. These bankruptcies reveal a startling reality: individual investors who placed their trust in these platforms have been stripped of their digital assets. In their stead, they hold hard-to-collect claims against these defunct platforms.

Amid the chill of the crypto winter, bankruptcy has …

Too Essential To Fail: Lessons From County Fiscal Crises, Michael A. Francus

Journal Articles

This Article draws out the lessons of counties for municipal finance. To do so, the Article begins by unpacking the municipal finance regulations that have provided counties with extraordinary fiscal safety. The Article then turns to case studies of the eleven counties that either filed for bankruptcy or had state fiscal interventions since the passage of the Bankruptcy Code in 1978. Those case studies show how counties' finances can (in rare cases) go wrong despite well-designed municipal finance regulations. The case studies also show how counties have successfully responded to those crises through bankruptcy and fiscal intervention.

Using that analysis, …

Death, Bankruptcy, And The Public Hospital, Michael A. Francus

Journal Articles

From the Article

This Article expands the purview of bankruptcy scholarship to those government businesses, assessing how Chapter 9 operates for them. It does so by taking public hospitals as a case study, offering a comprehensive look at every public-hospital bankruptcy between 1988 and 2021.

Modular Bankruptcy: Toward A Consumer Scheme Of Arrangement, John A. E. Pottow

Law & Economics Working Papers

The world of international bankruptcy has seen increasing use of the versatile scheme of arrangement, a form of corporate reorganization available under English law. A key feature of the scheme is its modularity, whereby a debtor can restructure only a single class of debt, such as bond indentures, without affecting other debt, such as trade. This is the opposite of chapter 11 of the U.S. Bankruptcy Code’s comprehensive reckoning of all financial stakeholders. This article considers a novel idea: could the scheme be transplanted into the consumer realm? It argues that it could and should. Substantial benefits of more individually …

Tinjauan Hukum Penerapan Hak Mendahulu Utang Pajak Dalam Perkara Kepailitan Pt Industries Badja Garuda Berdasarkan Undang-Undang Nomor 37 Tahun 2004 Tentang Kepailitan Dan Penundaan Kewajiban Pembayaran Utang, Siti Fatimah Citra Nurislamiati

"Dharmasisya” Jurnal Program Magister Hukum FHUI

This paper discusses the application of pre-emptive rights over tax debt collection in bankruptcy disputes regulated in Article 41 paragraph (3) of Law Number 37 of 2004 concerning the Bankruptcy and Deferral of Debt Payment Obligations displayed by the Directorate General of Taxes. Tax debts outside the bankruptcy process for compulsory taxes are being filed for bankruptcy by requesting the Commercial Court to return all tax liabilities that would harm the interests of the country. In the event that a taxpayer has been declared bankrupt, the Directorate General of Taxes still has the right to overtake and is privileged, requesting …

Stakeholderism Silo Busting, Aneil Kovvali

Articles by Maurer Faculty

The fields of antitrust, bankruptcy, corporate, and securities law are undergoing tumultuous debates. On one side in each field is the dominant view that each field should focus exclusively on a specific constituency—antitrust on consumers, bankruptcy on creditors, corporate law on shareholders, and securities regulation on financial investors. On the other side is a growing insurgency that seeks to broaden the focus to a larger set of stakeholders, including workers, the environment, and political communities. But these conversations have largely proceeded in parallel, with each debate unfolding within the framework and literature of a single field. Studying these debates together …

Portraits Of Bankruptcy Filers, Pamela Foohey, Robert M. Lawless, Deborah Thorne

Articles

One in ten adult Americans has turned to the consumer bankruptcy system for help. For almost forty years, the only systematic data collection about the people who file bankruptcy has come from the Consumer Bankruptcy Project (CBP), for which we serve as co-principal investigators. In this Article, we use CBP data from 2013 to 2019 to describe who is using the bankruptcy system, providing the first comprehensive overview of bankruptcy filers in thirty years. We use principal component analysis to leverage these data to identify distinct groups of people who file bankruptcy. This technique allows us to situate the distinctions …

Restructuring Support Agreements: An Empirical Analysis, Anthony J. Casey, Frederick Tung, Katherine Waldock

Faculty Scholarship

Restructuring support agreements (RSAs), or contracts that commit bankruptcy parties to supporting a plan of reorganization that will conform to certain requirements, are now a common feature of Chapter 11. Parties utilize these agreements in nearly half of all large cases. While prior literature has debated the normative value of RSAs, we take an empirical approach to look at what provisions the parties include in these agreements and how those provisions have changed over time.

Our analysis looks at all RSAs associated with large bankruptcies through the end of 2020. We characterize the types of firms with RSAs, the parties …

A Certainty Of Hopelessness: Adjustments To Student Exceptionalism In Bankruptcy Law, Jordan Higham, Jenica Bunderson

Brigham Young University Prelaw Review

For over forty years, student exceptionalism has been a crucial doctrine of U.S. bankruptcy law, stating that student debt can only be discharged in bankruptcy under extraordinary circumstances of undue hardship. This practice has been essential for the survival of the federal student loan program, however, the high and unclear standards for what constitutes undue hardship makes it almost impossible for even the most deserving debtors to discharge student debt. This paper explores the history of student exceptionalism and makes proposals for how to balance fairness between debtor and creditor.

Consent To Student Loan Bankruptcy Discharge, John P. Hunt

Indiana Law Journal

As the Department of Education reconsiders its rules governing consent to discharge of federal student loans in bankruptcy, this Article argues for the first time that the Department should approach the problem specifically as an operator of programs to promote education and benefit students, rather than as an entity interested only in debt collection. This Article shows that the Department’s rules to date have treated whether to consent to discharge primarily as a pecuniary issue, without regard to the educational goals of the student loan programs. For example, the Department apparently has never considered whether making it difficult to discharge …

Cross-Border Corporate Insolvency In The Era Of Soft(Ish) Law, John A.E. Pottow

Book Chapters

Insolvency law (bankruptcy law to some) moves so quickly in the cross-border realm that this piece's discussion, started in 2015, is probably already outdated. Nonetheless, I publish it unrepentantly because it turns overdue attention to the role of soft law in this domain. Building on earlier work in which I address the role of incrementalism, I discuss the marked success of the UNCITRAL Model Law on Cross-Border Insolvency and its cognate Insolvency Regulation in the EU (the latter now into its "Recast"). As predicted/hoped, the EU Recast, joining other contemporaneous reform projects, is building upon the scaffolding of legal doctrines …

Race And Bankruptcy: Explaining Racial Disparities In Consumer Bankruptcy, Edward R. Morrison, Belisa Pang, Antoine Uettwiller

Faculty Scholarship

African American bankruptcy filers select Chapter 13 far more often than other debtors, who opt instead for Chapter 7, which has higher success rates and lower attorneys’ fees. Prior scholarship blames racial discrimination by attorneys. We propose an alternative explanation: Chapter 13 offers benefits, including retention of cars and driver’s licenses, that are more valuable to African American debtors because of relatively long commutes. We study a 2011 policy change in Chicago, which seized cars and suspended licenses of consumers with large traffic-related debts. The policy produced a large increase in Chapter 13 filings, especially by African Americans. Two mechanisms …

Bankruptcy's Cathedral: Property Rules, Liability Rules, And Distress, Vincent S.J. Buccola

Northwestern University Law Review

What justifies corporate bankruptcy law in the modern economy? For forty years, economically oriented theorists have rationalized bankruptcy as an antidote to potential coordination failures associated with a company’s financial distress. But the sophistication of financial contracting and the depth of capital markets today threaten the practical plausibility, if not the theoretical soundness, of the conventional model. This Article sets out a framework for assessing bankruptcy law that accounts for changes in the technology of corporate finance. It then applies the framework to three important artifacts of contemporary American bankruptcy practice, pointing toward a radically streamlined vision of the field. …

The Dialogic Aspect Of Soft Law In International Insolvency: Discord, Digression, And Development, John A. E. Pottow

Law & Economics Working Papers

Soft law is on the ascent in international insolvency, seeming now to occupy a preferred status over boring old conventions. An arguably constitutive aspect of soft law, which some contend provides a normative justification for international law generally, is its "dialogic" nature, by which I mean its intentional exposure to recursive norm contestation and iterative development: soft law starts a dialogue. The product of that dialogue, on a teleological view, may well be hard law. In the international insolvency realm, that pathway is through (soft) model domestic legislation that aspires toward enactment as municipal law. The happy story is that …

Reforming Institutions: The Judicial Function In Bankruptcy And Public Law Litigation, Kathleen G. Noonan, Jonathan C. Lipson, William Simon

Indiana Law Journal

Public law litigation (PLL) is among the most important and controversial types of dispute that courts face. These civil class actions seek to reform public agencies such as police departments, prison systems, and child welfare agencies that have failed to meet basic statutory or constitutional obligations. They are controversial because critics assume that judicial intervention is categorically undemocratic or beyond judicial expertise.

This Article reveals flaws in these criticisms by comparing the judicial function in PLL to that in corporate bankruptcy, where the value and legitimacy of judicial intervention are better understood and more accepted. Our comparison shows that judicial …

Venezuela Undermines Gold Miner Crystallex's Attempts To Recover On Its Icsid Award, Sam Wesson

Loyola of Los Angeles International and Comparative Law Review

No abstract provided.

Puerto Rico Debt Restructuring: Origins Of A Constitutional And Humanitarian Crisis, Elizabeth Whiting

University of Miami Inter-American Law Review

No abstract provided.

Are Charter Schools The Second Coming Of Enron?: An Examination Of The Gatekeepers That Protect Against Dangerous Related-Party Transactions In The Charter School Sectors, Preston C. Green Iii, Bruce D. Baker, Joseph O. Oluwole

Indiana Law Journal

INTRODUCTION

OVERVIEW OF ENRON

A. ENRON AND DEREGULATION

B. THE LJM SPES

C. ENRON’S COLLAPSE

II: ENRON’S GATEKEEPER PROBLEMS

A. ARTHUR ANDERSEN

B. INDEPENDENT ANALYSTS

C. CREDIT RATING AGENCIES

D. ENRON’S BOARD OF DIRECTORS

E. SECURITIES AND EXCHANGE COMMISSION (SEC)

III: CHARTER SCHOOLS AND RELATED-PARTY TRANSACTIONS

A. CHARTER SCHOOL DEREGULATION AND PRIVATE INVESTORS

B. EXAMPLES OF ENRON-LIKE RELATED-PARTY TRANSACTIONS

1. IMAGINE SCHOOLS

2. IVY ACADEMIA CHARTER SCHOOL

3. AMERICAN INDIAN MODEL CHARTER SCHOOLS

4. GRAND TRAVERSE ACADEMY

5. PENNSYLVANIA CYBER CHARTER SCHOOL

C. THE FEDERAL GOVERNMENT, RELATED-PARTY TRANSACTIONS, AND THE NEED FOR STRONG GATEKEEPING

IV: CHARTER SCHOOL GATEKEEPERS

A. AUDITORS …

Rethinking Criminal Contempt In The Bankruptcy Courts, John A. E. Pottow, Jason S. Levin

Law & Economics Working Papers

A surprising number of courts believe that bankruptcy judges lack authority to impose criminal contempt sanctions. We attempt to rectify this misunderstanding with a march through the historical treatment of contempt-like powers in bankruptcy, the painful statutory history of the 1978 Bankruptcy Code (including the exciting history of likely repealed 28 U.S.C. § 1481), and the various apposite rules of procedure. (Fans of the All Writs Act will delight in its inclusion.) But the principal service we offer to the bankruptcy community is dismantling the ubiquitous and persistent belief that there is some form of constitutional infirmity with "mere" bankruptcy …

Martin Luther King, Jr. Celebration Keynote Speaker: Don Graves, Deputy Assistant To President Obama And Counselor To Vice President Biden: January 24, 2017, Roger Williams University School Of Law

School of Law Conferences, Lectures & Events

No abstract provided.

Inside Safe Assets, Anna Gelpern, Erik F. Gerding

Publications

“Safe assets” is a catch-all term to describe financial contracts that market participants treat as if they were risk-free. These may include government debt, bank deposits, and asset-backed securities, among others. The International Monetary Fund estimated potential safe assets at more than $114 trillion worldwide in 2011, more than seven times the U.S. economic output that year.

To treat any contract as if it were risk-free seems delusional after apparently super-safe public and private debt markets collapsed overnight. Nonetheless, safe asset supply and demand have been invoked to explain shadow banking, financial crises, and prolonged economic stagnation. The economic literature …

Recent Developments In Bankruptcy Regulation: Mortgage Servicing Rules, The Fdcpa, And The Cfpb, Frederick Tung, Alane A. Becket, Sarah Bolling Mancini, Nick Wooten

Faculty Scholarship

MS. DEPPERT: Welcome back. Before we begin, I'd like to take this opportunity to introduce you to our second panel of the day, our Consumer Panel, which will discuss Recent Developments in Bankruptcy Regulation, including mortgage servicing rules, the Fair Debt Collection Practices Act (the "FDCPA"), and the Consumer Financial Protection Bureau (the "CFPB"). This afternoon we are privileged to have the following distinguished panelists join us. First we have Alane Becket, Managing Partner at Becket & Lee LLP, in Malvern, Pennsylvania, a law firm representing primarily consumer lenders in bankruptcy proceedings. Ms. Becket was elected to the Board of …

Beyond Options, Edward R. Morrison, Anthony J. Casey

Faculty Scholarship

Scholars and policymakers now debate reforms that would prevent a bankruptcy filing from being a moment that forces valuation of the firm, crystallization of claims against it, and elimination of junior stakeholders’ interest in future appreciation in firm value. These reforms have many names, ranging from Relative Priority to Redemption Option Value. Much of the debate centers on the extent to which reform would protect the non-bankruptcy options of junior stakeholders, or harm the non-bankruptcy options of senior lenders. We argue that this focus on options misplaced. Protecting options is neither necessary nor sufficient for advancing the goal of a …

4th And 205: How A Rush Of Global Comments Blocked The Sec’S First Attempted Punt Of Attorney-Client Privilege Under Sarbanes-Oxley, John Paul Lucci

Touro Law Review

No abstract provided.

When Should Bankruptcy Be An Option (For People, Places, Or Things)?, David A. Skeel Jr.

William & Mary Law Review

When many people think about bankruptcy, they have a simple left-to-right spectrum of possibilities in mind. The spectrum starts with personal bankruptcy, moves next to corporations and other businesses, and then to municipalities, states, and finally countries. We assume that bankruptcy makes the most sense for individuals; that it makes a great deal of sense for corporations; that it is plausible but a little more suspect for cities; that it would be quite odd for states; and that bankruptcy is unimaginable for a country.

In this Article, I argue that the left-to-right spectrum is sensible but mistaken. After defining “bankruptcy,” …

Synthetic Cdos, Conflicts Of Interest, And Securities Fraud, Jennifer O'Hare

University of Richmond Law Review

No abstract provided.

Reclaim This! Getting Credit Seller Rights In Bankruptcy Right, Lawrence Ponoroff

University of Richmond Law Review

No abstract provided.

Health And Financial Fragility: Evidence From Car Crashes And Consumer Bankruptcy, Edward R. Morrison, Arpit Gupta, Lenora M. Olson, Lawrence Cook, Heather Keenan

Faculty Scholarship

This paper assesses the importance of adverse health shocks as triggers of bankruptcy filings. We view car crashes as a proxy for health shocks and draw on a large sample of police crash reports linked to hospital admission records and bankruptcy case files. We report two findings: (i) there is a strong positive correlation between an individual's pre-shock financial condition and his or her likelihood of suffering a health shock, an example of behavioral consistency; and (ii) after accounting for this simultaneity, we are unable to identify a causal effect of health shocks on bankruptcy filing rates. These findings emphasize …