Bankruptcy Law Commons^™

Not Out Of The (Fox)Woods Yet: Indian Gaming And The Bankruptcy Code, Emir Aly Crowne, Andrew Black, S. Alex Constantin

UNLV Gaming Law Journal

The recent economic downturn has caused Foxwoods Resort Casino, one of the largest casinos in the world, to seek a restructuring of nearly $1.5 billion in debt. Ordinarily, bankruptcy proceedings are triggered when a typical commercial enterprise defaults on its debt. Under these proceedings, creditors step in and collect monies owed to them before any residual equity is dispersed amongst owners. The rub here is that Foxwoods is owned and operated by the Mashantucket Western Pequot Tribal Nation, a sovereign nation under U.S. federal law. This triggers questions of paramountcy; namely, whether tribunal sovereignty can trump federal bankruptcy law.

These …

Milavetz, Gallop & Milavetz, Pa. V. United States: "In Contemplation Of' The Meaning, Applicability, And Validity Of Attorney Restrictions In The Bapcpa, Joseph D. Orenstein

Mercer Law Review

In Milavetz, Gallop & Milavetz, PA. v. United States, the Supreme Court of the United States held that, under section 227 of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA), attorneys who provide bankruptcy counsel are "debt relief agencies." The Court also held two BAPCPA provisions constitutional: one provision that prevented debt relief agencies from advising a debtor to incur more debt in contemplation of bankruptcy and another that imposed disclosure requirements on debt relief agencies. In light of the inconsistent and unclear interpretations of BAPCPA provisions considered in this case, the Court's ruling acts to …

Integrating "Alternative" Dispute Resolution Into Bankruptcy: As Simple (And Pure) As Motherhood And Apple Pie?, Nancy A. Welsh

Faculty Scholarship

Today, there can be little doubt that “alternative” dispute resolution is anything but alternative. Nonetheless, many judges, lawyers (and law students) do not truly understand the dispute resolution processes that are available and how they should be used. In the shadow of the current economic crisis, this lack of knowledge is likely to have negative consequences, particularly in those areas of practice such as bankruptcy and foreclosure in which clients, lawyers, regulators, and courts work under pressure, often with inadequate time and financial resources to permit careful analysis of procedural options. Potential negative effects can include: (1) impairment of a …

A Test Case In International Bankruptcy Protocols: The Lehman Brothers Insolvency, Jamie Altman

San Diego International Law Journal

Part II of this Article, explains the competing theories underlying bankruptcy systems: universalism and territorialism. Part III details various statutory solutions to international bankruptcy problems. Next, Part IV analyzes the provisions of the Lehman Protocol in depth. Part V then examines the precedent upon which the Lehman Protocol relies. Part VI assesses potential threats to the Protocol?s success. This leads to Part VII, which contains suggestions for future protocols. Finally, Part VIII concludes.

"Some Portion Of Misconduct": The Argument For A Negligence Standard For Expecting Discharge Of Debts Incurred Through Defalcation, Alyssa Miller

William & Mary Business Law Review

The United States Circuit Courts are currently split on the correct standard for defalcation: that is, they are split on what level of mental culpability a fiduciary must possess before bankruptcy courts exclude debts incurred through misconduct from discharge. The First, Fifth, Sixth, and Seventh Circuits apply a recklessness standard. The Fourth, Eighth, and Ninth Circuits apply a negligence standard. The time has come to resolve the circuit split because the inter-jurisdictional nature of business in the twenty-first century creates a danger that fiduciaries will not have notice of potential liability if standards for liability vary from jurisdiction to jurisdiction. …

The Potential Value Of Dynamic Tension In Restructuring Negotiations, Michelle M. Harner, Jamie Marincic

Faculty Scholarship

No abstract provided.

The Story Of Kmart's Reorganization, John Fisher, Justin Wolbert

Chapter 11 Bankruptcy Case Studies

No abstract provided.

Debarring Faithless Corporate And Religious Fiduciaries In Bankruptcy, Lyman P.Q. Johnson

Scholarly Articles

Fiduciary duties for the top governance officials of both business and religious organizations demand faithfulness to the institution’s mission, a seemingly strict demand. Meaningful sanctions for breach, however, are difficult to obtain and may not deter future misconduct, including that kind of conduct leading to organizational bankruptcy. This article advocates that, to attain both special and general deterrence, bankruptcy law should look to other regulatory regimes and permit a bankruptcy court to debar faithless secular and ecclesiastical fiduciaries from holding certain leadership positions. Although written shortly before the 2012 Supreme Court Hosanna-Tabor decision, that opinion – addressing the “ministerial exception” …

Bankruptcy, Relocation, And The Debtor's Dilemma: Preserving Your Homestead Exemption Versus Accepting The New Job Out Of State, Timothy R. Tarvin

Loyola University Chicago Law Journal

Current unemployment levels have forced a significant portion of homeowners to contemplate bankruptcy. In an attempt to avoid the impending bankruptcy, those homeowners have sought new employment, even when that new employment would entail moving to a different state. Yet crossing state lines may be the worst strategy for a debtor considering bankruptcy. Most jurisdictions limit the homestead exemption in bankruptcy to residents; to exempt a home from creditor claims, a debtor must have lived in her current domicile for two years. Thus, the unemployed debtor who is trying to avoid bankruptcy by moving out of state to begin new …

A Delicate Balancing Act: Satisfying The Fourth Amendment While Protecting The Bankruptcy System From Debtor Fraud, 28 Yale Journal On Regulation 367 (2011), Michael D. Sousa

Sturm College of Law: Faculty Scholarship

Since the Middle Ages, bankruptcy laws have been concerned with preventing and deterring fraudulent debtors, most notably debtors who willfully fail to fully disclose all of their assets to their creditors. This concern was no less prevalent during the passage of the first Bankruptcy Act in the United States in 1800, which established bankruptcy fraud as a criminal offense. No doubt, the evolution of modern American bankruptcy law has moved toward a more liberal treatment of debtors. Significantly, so long as debtors conform to certain behavioral norms prescribed in the Bankruptcy Code, honest, but unfortunate debtors can expect to receive …

The Legal Infrastructure Of Ex Post Consumer Debtor Protections, Melissa B. Jacoby

Fordham Urban Law Journal

This article reviews the legal infrastructure of tools that protect debtors’ assets or income, or that enable debtors to resolve secured credit problems during ordinary times (e.g., not specific crisis interventions). Part I divides consumer protection tools into functional categories: protection of assets and future income, and retention of property subject to a security interest in default. Part II identifies the location of similar tools in federal law, uniform state law, and non-uniform state law. Part III examines implications of this divided system, with a special focus on the bundling of debtor protections and the role of intermediaries. This discussion …

The "Current Monthly Income" Debate: Unemployment Compensation As A "Benefit Received Under The Social Security Act"?, 44 J. Marshall L. Rev. 801 (2011), Brent Wilson

UIC Law Review

No abstract provided.

Drug Fair Group, Inc., Robby Lockett, Scott Lochridge, Jessica Manning

Chapter 11 Bankruptcy Case Studies

No abstract provided.

Unveiling The Mystery, History, And Problems Associated With The Jurisdictional Limitations Of Bankruptcy Courts Over Personal Injury Tort And Wrongful Death Claims, Ishaq Kundawala

Articles

The current jurisdictional structure of bankruptcy courts in the United States is nothing short of a mystery. Scholars, judges, and practitioners have long struggled with finding their way through the confusing labyrinth of jurisdictional rules, exceptions, and exclusions in our current bankruptcy system. Courts spend countless hours each year considering all kinds of jurisdictional issues that arise in bankruptcy cases. This results in a diversion of judicial resources from substantive matters. Adding to this quandary is the limited scope of bankruptcy courts' jurisdiction over a small but very significant subset of claims-personal injury tort and wrongful death claims-which weaves yet …

The Terrible TousaS: Opinions Test The Patience Of Corporate Lending Practices, Jessica D. Gabel

Faculty Publications By Year

Two diametrically opposed decisions pit creditors against debtors. The case of troubled homebuilder TOUSA has generated shockwaves through the lending industry. Set against the backdrop of the housing collapse and risky lending, the bankruptcy court’s decision left secured creditors with a mixture of shock, anger, and worry over the repercussions. In that opinion, the bankruptcy court unwound a nearly $1 billion transaction of liens and loan proceeds, on grounds that the transactions drove the debtor company into the ground. In other words, the court found that a fraudulent transfer had occurred. Not surprisingly, the lenders appealed and the next decision …

Midnight In The Garden Of Good Faith: Using Clawback Actions To Harvest The Equitable Roots Of Bankrupt Ponzi Schemes, Jessica D. Gabel

Faculty Publications By Year

This paper addresses an increasingly relevant issue in bankruptcy – does it make sense to protect “good faith” investors who have invested (some quite profitably) in a Ponzi scheme from clawback actions by the trustee? This article presents issues of economic equity (equitable payouts to individual creditors vs. equitable distribution among all creditors); bankruptcy policy (retaining antiquated notions of good faith in an ever-evolving financial playground); and judicial inconsistency (disparities in the treatment on Ponzi investors). * In the aftermath of the financial crisis, investors have attempted to pull their money back from the markets, collapsing hundreds of Ponzi schemes …

Committee Capture? An Empirical Analysis Of The Role Of Creditors' Committees In Business Reorganizations, Michelle M. Harner, Jamie Marincic

Faculty Scholarship

The number of businesses experiencing financial distress increased significantly during the past several years. The number of Chapter 11 reorganization cases likewise rose. And many of these business failures were spectacular, leaving little value for creditors and even less for shareholders. Consequently, how the business debtor’s limited asset pie is divided and who gets to allocate the pieces are very relevant and important questions.

The U.S. Bankruptcy Code generally contemplates the appointment of a committee of the debtors’ unsecured creditors to serve as a fiduciary for all general unsecured creditors and as a statutory watchdog over the debtor and its …

The Chapter 13 Alternative: A Legislative Solution To Undersecured Home Mortgages, Samuel Bufford

Faculty Scholarship

This article discusses minor changes to the U.S. Bankruptcy Code that would make avoiding foreclosure possible for a homeowner who (a) is presently not able to make the mortgage service payments but (b) could make payments for a mortgage that is reduced to the market value of the property and to a fixed market mortgage rate. This article does not address the political issue of what protections Congress might decide to provide mortgage owners and servicers as a part of such legislation.

The Rise In Elder Bankruptcy Filings And The Failure Of U.S. Bankruptcy Law, John A. E. Pottow

Articles

Recent empirical legal scholarship on the consumer bankruptcy system has uncovered a marked rise in the proportion of elder Americans filing for relief under the Bankruptcy Code. But these studies have not probed the reasons behind that rise, an omission this Article seeks to address. Professor John Pottow and colleagues recently assembled the new dataset of the Consumer Bankruptcy Project (CBP), the largest national sample of consumer debtors in this country, which he uses to explore the sources of elder bankruptcy. The findings are both striking and ominous. While multiple factors, such as health problems and medical debts, contribute to …

A New Role For Secondary Proceedings In International Bankruptcies, John A. E. Pottow

Articles

Secondary proceedings-the ugly stepsisters to main proceedings-get short shrift in international bankruptcy scholarship. This article seeks to remedy that deficiency. First, it describes what it argues are the traditional conceptions-both stated and implicit-of secondary proceedings in international bankruptcies. Second, it offers a revised way of thinking about secondary proceedings, proposing to restrict their scope through the use of "synthetic" hearings. Third, it addresses some problems with the proposed new role of secondary proceedings and sketches a possible solution involving the creation of an international priorities registry.