Bankruptcy Law Commons^™

Article 9'S Bankrupt Proceeds Rule: Amending Bankruptcy Code Section 552 Through The Ucc Proceeds Definition, G. Ray Warner

Faculty Publications

Ten years ago, just as revised Article 9 was becoming effective, I documented how several of the Article 9 revisions had little or no nonbankruptcy function, but were designed primarily to alter bankruptcy law outcomes in favor of secured creditors. I argued that such attempts to amend federal bankruptcy law through the state uniform laws revision process were improper and suggested theories that would limit or avoid the intended bankruptcy law changes. This anniversary symposium provides an excellent opportunity to revisit one of those Article 9 revisions in greater detail and see how successful the drafters' anti-bankruptcy agenda has been.

Religion And Bankruptcy, Keith Sharfman, G. Ray Warner

Faculty Publications

(Excerpt)

From the time of its creation and throughout its evolution, bankruptcy law has affected and been affected by religion. Important aspects of current bankruptcy law, such as the discharge of debt and the exemption of personal property, originated in religious traditions before making their way into secular law. At the same time, religious individuals and institutions are themselves often parties in bankruptcy cases, and the Bankruptcy Code specifically protects religious contributions from avoidance as fraudulent transfers, excludes them from consideration in connection with the dismissal of a bankruptcy case for reasons of abuse, and allows them as a deductible …

A Minimalist Approach To State ‘Bankruptcy’, Steven L. Schwarcz

Faculty Scholarship

Increasingly finding themselves in financial straitjackets, states have been turning to austerity measures, tax increases, privatization of services, and renegotiation of collective bargaining agreements. Absent a federal government bailout, however, states will also need debt relief if their debt burden becomes so crushing that reasonable efforts at fiscal reform will fail to avoid default. Some advocate providing this relief by, effectively, extending municipal bankruptcy law to states. That approach brings in excess baggage, however, engendering political opposition and constitutional concerns. There is a simpler solution: Enable states to work out their debt problems with their creditors. Although the main obstacle …

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.

At What Cost? Access To Consumer Credit In A Post-Financial Crisis Canada, Janis P. Sarra

All Faculty Publications

Access to consumer credit is influenced by many factors, such as amount and security of the consumer’s income, and credit card company and financial institution practices. Access is also driven by social, cultural and cognitive factors, including consumer understanding of the cost of credit; perceptions regarding ability to repay; cognitive influences regarding immediate consumption and delayed payment; understanding of the benefits and risks of debt to economic security; and the conflicts of interest inherent in the business of lending. Overall, bank and credit union credit has tightened since the global financial crisis. However, the study found that for many Canadians, …

Reconceptualizing Present-Value Analysis In Consumer Bankruptcy, Rafael I. Pardo

Scholarship@WashULaw

During the three decades following the enactment of the Bankruptcy Code, courts and commentators have been vexed by the problem of determining the present value of future payments to creditors proposed in a debtor’s repayment plan. The central issue to this problem has been the discount rate to be applied when conducting present-value analysis. While the Code unmistakably requires the discounting of future payments as part of the process for confirming a repayment plan, the Code does not explicitly specify the rate itself or the manner in which the rate should be calculated. No uniform rule of decision has emerged …

Japan's Business Revitalization Adr: An Economic Savior Or A Convenient Excuse To Avoid Bankruptcy?, Naoko Okamoto

Cardozo Journal of Conflict Resolution

This Note analyzes Japan's newly enacted "Business Revitalization Alternative Dispute Resolution" (ADR) and its effectiveness in revitalizing the Japanese economy. Due to ADR's economic and procedural ease, Business Revitalization ADR has been employed by companies undergoing revitalization processes and negotiating with creditors in extending debt payments. Nonetheless, ADR proceedings, specifically mediation between creditors and debtors, create only short-term economic value. Because of cultural characteristics of mediation and the nature of mediation in the business context in Japan, Business Revitalization ADR may be subject to abuse by companies that should have gone bankrupt. In fact, many companies may save themselves from …

Copyrights And Creditors: What Will Be Left Of The King Of Pop's Legacy?, Jessica Bozarth

Cardozo Arts & Entertainment Law Journal

No abstract provided.

Orphaned Art Consignors: Confusion In The Courts And The Ucc, Michael Madigan

Cardozo Arts & Entertainment Law Journal

No abstract provided.

Ask The Professor: “Omg! What Did Mf Global Do?, Ronald Filler

Articles & Chapters

This paper, written one week after MF Global, a large futures brokerage firm filed for bankruptcy, analyzes the bankruptcy, its impact on futures customers and the shortfall in customer funds that occurred on October 31, 2011. Subsequent to MF Global's bankruptcy, several customer protection rules were amended by the U.S. Commodity Futures Trading Commission and the National Futures Association.

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.

Trusts And Estates - Spendthrift Trusts And The "Happenstance Of Bankruptcy" Rule, Jonathan R. Shulan

University of Arkansas at Little Rock Law Review

No abstract provided.

Race, Educational Loans & Bankruptcy, Abbye Atkinson

Michigan Journal of Race and Law

This Article reports new data from the 2007 Consumer Bankruptcy Project revealing that college graduates and specifically White graduates are less likely to file for bankruptcy than their counterparts without a college degree. Although these observations suggest that a college degree helps graduates to weather the setbacks that sometimes lead to financial hardship as measured by bankruptcy, they also indicate that a college degree may not help everyone equally. African American college graduates are equally likely to file for bankruptcy as African Americans without a college degree. Thus, a college education may not confer the same protective benefit against financial …

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

Law & Economics Working Papers

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 …

Bankruptcy, James D. Walker Jr., Amber Nickell

Mercer Law Review

I. INTRODUCTION

In 2009 the country entered into a significant recession, but bankruptcy law-perhaps surprisingly-remained relatively static, at least in the Eleventh Circuit. On a national level, things were a bit more interesting; the Chrysler bankruptcy was much discussed in the media and there was a renewed interest in allowing individuals to modify primary residence mortgages in bankruptcy. Still, even the collapse of the housing market could not move Congress to amend the Bankruptcy Code. Despite the action on a national level, in the Eleventh Circuit it was business as usual with a year that can best be described as …

The Federal Rules Of Bankruptcy Procedure In Reorganization Cases: Do They Have A Constitutional Dimension?, David G. Carlson

Articles

The article examines the implications of the Supreme Court's decision in United Student Aid Funds, Inc. v. Espinosa, which significantly impacts bankruptcy law by establishing that due process in bankruptcy reorganization cases is governed by the minimalist standard set forth in Mullane v. Central Hanover Bank & Trust Co. This ruling undermines the constitutional dimension of the Bankruptcy Rules, strengthens the finality of reorganization plans under res judicata, and affects the discharge of student loans without an adversary proceeding. The decision highlights the tension between due process rights of creditors and the finality of bankruptcy court rulings, while also reshaping …

Why Banks Are Not Allowed In Bankruptcy, Richard M. Hynes, Steven D. Walt

Washington and Lee Law Review

Unlike most other countries, the United States uses different Procedures to resolve insolvent banks and nonbank firms. The Bankruptcy Code divides control over nonbank firms among the various claimants, and a judge supervises the resolution process. By contrast, the FDIC acts as the receiver for an insolvent bank and has almost complete con trol. Other claimants can sue the FDIC, but they cannot obtain injunctive relief and their damages are limited to the amount that they would have received in liquidation. The FDIC has acted as the receiver of insolvent banks since the Great Depression, and the concentration of power …

Tragedy On The Descent: The Ascent And Fall Of Eddie Bauer, Austin Fleming, Bryan C. Hathorn

Chapter 11 Bankruptcy Case Studies

For many entrepreneurs, bankruptcy is the unfortunate end of what began as a business dream. The birth of a business is an exciting time for the entrepreneur, but its death is often a painful process—both for the company's owners and its creditors. Those businesses that choose not to reorganize close their doors forever. However, reorganization can often salvage a business enterprise that is a good one but is impaired by debt, crisis, or simple bad luck.

The goals of the reorganization process are clear—the idea is to produce a viable business enterprise but one not necessarily owned by the original …

Appalachian Oil Company, Inc.: A Company's Journey After Running Out Of Gas, Allison S. Jackson, Raymond G. Lewallen Jr., Jennifer T. Mcginn

Chapter 11 Bankruptcy Case Studies

When Appalachian Oil Company, Inc. filed for Chapter 11 protection on February 9, 2009, it marked the end of an era for a company with more than eighty-six years of experience in the petroleum products industry. The company’s failure was attributable to a couple of factors, including the worst financial crisis since the Great Depression and a parasitic parent company. The combination of a lack of operating income and access to credit rendered the company insolvent and unable to continue its operations. Appalachian Oil Company, Inc.’s journey through Chapter 11, however, was unique in that it never reemerged; rather, the …

Active Ride Shop : Chapter 11 Bankruptcy, Matt Fink, Philip Meyer

Chapter 11 Bankruptcy Case Studies

In 2008, hundreds of people waited in the rain for the grand opening of Active Ride Shop’s new Chico Hills location, its twenty-sixth store and its biggest opening event yet. In the same year, Active was awarded the Surf Industry Men’s Retailer of the Year Award, yet less than a year later the company would file for chapter 11 protection. This paper will explore Active’s financial downturn and resulting chapter 11 case, inform the reader about the workings of the chapter 11 process, and impart an understanding of how the process works in the context of a non-plan sale of …