Bankruptcy Law Commons^™

Scaling 'Reverse Cfius': A Comparative Review Of Outbound Foreign Investment, Hannah Pérez

Cardozo International & Comparative Law Review

The note examines the evolution of U.S. regulations on outbound foreign investments, particularly under Executive Order 14105, known as "Reverse CFIUS," aimed at mitigating national security risks by restricting investments in critical industries in countries like China. It explores the legal, economic, and geopolitical implications of these regulations and compares them with similar measures in the EU, Japan, and Australia, emphasizing the need for international cooperation to effectively address these security concerns.

Restructuring Ruritania: Bankruptcy, Sovereign Debt, And The Equity Receivership, Nathan B. Oman

Faculty Publications

The traditional legal story of sovereign restructuring goes something like this: foreign governments cannot file for bankruptcy under domestic law. When faced with the need to restructure unsustainable debts, they must negotiate with each of their creditors. Since the late 1980s, private debt has been held by increasingly diverse and dispersed bondholders, making renegotiation more difficult. Defaulting debtors face two basic problems: first, they have no process analogous to the automatic stay in bankruptcy, which can pause litigation by creditors and buy time for an orderly reorganization; second, and more importantly, they have no process analogous to the cramdown provisions …

Volume 48 Masthead, Seattle University Law Review

Seattle University Law Review

Volume 48 Masthead

Voting Matters: Materiality Considerations And The Shareholder Vote, Renee M. Jones

Seattle University Law Review

For the shareholder franchise to have meaning, shareholders must have access to relevant information to inform their voting decisions. The securities laws’ disclosure requirements play an essential role in informing the shareholder vote.

This Essay focuses on the question of the materiality of information in the context of shareholder voting. It addresses the question of whether ESG-related information is material, positioning the materiality inquiry within the context of shareholders’ voting decisions. It explores the definition of materiality with a focus on the “reasonable investor” concept embedded within the definition. The Essay argues that the implicit expectations of many commentators that …

Volume 48 Masthead, Seattle University Law Review

Seattle University Law Review

Volume 48 Masthead

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

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 …

Executory Contract Provisions That Provide Solely For An Equitable Remedy Are Enforceable Post-Rejection., Ashley Romeo

Bankruptcy Research Library

(Excerpt)

Under Section 365(a) of title 11 of the United States Code (the "Bankruptcy Code"), "a trustee [or debtor in possession], subject to the court’s approval, may assume, or reject an executory contract." Generally, a contract is executory if "performance remains due to some extent on both sides." In general, a debtor may decide whether its executory contract is a good deal going forward. The debtor will likely want to reject a contract that is no longer a good deal in order to repudiate any further performance of its duties. When reviewing the trustee or debtor-in-possession’s decision to assume or …

Rejection Of An Executory Contract Does Not Invalidate Rights Exercised Or Performance Rendered Prior To Rejection, Samantha B. Caraballo

Bankruptcy Research Library

(Excerpt)

Under section 365 of Title 11 of the United States Code (the "Bankruptcy Code"), a trustee or a debtor in possession may "reject" an executory contract. Rejection results in a breach of contract. Courts consider non-bankruptcy contract law to determine the impact of the breach on the executory contract. In general, rejection does not undo a party’s past performance or exercise of rights under the contract. Instead, it relieves a debtor from its future obligation to perform.

Part I of this Article explains the different approaches to defining "executory contract." Part II of this Article elaborates on a trustee …

Property Of The Estate Under Section 541—Accrual Of Causes Of Action And The "Sufficiently Rooted" Test, Hayung Park

Bankruptcy Research Library

(Excerpt)

This article examines the scope of property included in a bankruptcy estate under section 541 of the Bankruptcy Code, with a focus on causes of action arising both before and after the bankruptcy petition date. Courts apply a two-part analysis to determine whether a claim is part of the estate: (1) whether it accrued as of the petition date, and (2) whether a post-petition claim is sufficiently rooted in the pre-bankruptcy past. This article explores how courts interpret and apply these components to determine estate property.

Non-Consensual Third-Party Releases From Mass-Tort Liabilities Cannot Be Part Of A Chapter 11 Plan, Seth Woodhall

Bankruptcy Research Library

(Excerpt)

Chapter 11 bankruptcy is a process that has allowed many corporations to "work with its creditors to develop a reorganization plan governing the distribution of the estate’s assets[.]" Under 11 U.S.C. §1141(a) once the bankruptcy court confirms the plan, that plan becomes legally binding on the debtor and all creditors—including those who may have not agree to it. "Some plan terms are mandatory, §1123(a); others are optional, §1123(b). [Terms permitting a third-party release] is a provision a debtor may include and a court may approve in a reorganization plan." By presenting a plan to the bankruptcy court as part …

Dismissal Of Chapter 11 Cases For Lack Of Good Faith Filing, Amanda Alongi

Bankruptcy Research Library

(Excerpt)

Section 1112 of title 11 of the United States Code (the "Bankruptcy Code") provides that a Chapter 11 case can be converted or dismissed, upon the request of an interested party, "for cause." While cause is required, the Bankruptcy Code does not provide a definition. Rather, section 1112(b)(4) provides a non-exhaustive list of examples that constitute "cause." In addition to the statutory examples, almost all courts interpret "cause" to include a lack of good faith. The Bankruptcy Code also does not define good faith, resulting in courts adopting different approaches to determine good faith. Therefore, when an interested party …

The Delaware Bankruptcy Court's Approach To The Subjective Prong Of The Ordinary Course Of Business Defense, Andrew Cardello

Bankruptcy Research Library

(Excerpt)

The ordinary course of business defense (the "OCB Defense") to preference claims under section 547(c)(2)(A) of title 11 of the United States Code (the "Bankruptcy Code") protects transfers that are consistent with previous transactions between a debtor and creditor. In evaluating this defense, the United States Bankruptcy Court for the District of Delaware (the "Delaware Bankruptcy Court") conducts a fact-intensive inquiry into whether the challenged transfers were consistent with the parties’ previously established business practices. Key considerations include the length and regularity of the relationship, the timing and method of the transactions, and the absence of aggressive collection tactics …

Insurers Have Standing To Object To Reorganization Plans, Haley Daniels

Bankruptcy Research Library

(Excerpt)

Section 1109 of title 11 of the United States Code (the "Bankruptcy Code") allows any "party in interest" to raise, appear, and be heard on any issue in a chapter 11 bankruptcy case. The term party in interest is not otherwise defined in the Bankruptcy Code. The United States Supreme Court has interpreted the phrase to describe a party that has a sufficient stake in the outcome of the bankruptcy reorganization. Importantly, Section 1128(b) of the Bankruptcy Code explicitly provides that a party in interest "may object to confirmation of a plan" in a chapter 11 case.

The United …

Granting A Stay For Non-Debtors, Daniel Denaroso

Bankruptcy Research Library

(Excerpt)

Under section 362 of title 11 of the United States Code (the "Bankruptcy Code"), the filing of a bankruptcy petition results in an automatic stay of actions against a debtor or its assets. While the automatic stay is primarily for the benefit of the debtor, courts have generally extended the stay to non-debtors. However, the Supreme Court disrupted this principle in Purdue by interpreting that the Bankruptcy Code does not authorize a release that effectively discharges a non-debtor’s obligations. Since then, courts have generally interpreted Purdue narrowly to avoid eliminating the ability to grant a stay for non-debtors.

This …

The Valuation Of Crypto Currency Mining Property Under 11 U.S.C. § 506(A)(1), Michael Galletti

Bankruptcy Research Library

(Excerpt)

Section 506(a)(1) of title 11 of the United States Code (the "Bankruptcy Code") provides that a secured creditor's claim is "a secured claim to the extent of the value of such creditor's interest in the estate's interest in such property . . . and is an unsecured claim to the extent that the value of such creditor's interest . . . is less than the amount of such allowed claim." The valuation of collateral is determined "in light of the purpose of the valuation and of the proposed disposition or use of such property." However, the Bankruptcy Code is …

Reconsideration Of A Previously Allowed Or Disallowed Claim Under Section 502(J) Of The Bankruptcy Code In New York And Delaware., Kalina Mesrobian

Bankruptcy Research Library

(Excerpt)

Section 502(j) of title 11 of the United States Code (the "Bankruptcy Code") states that "[a] claim that has been allowed or disallowed may be reconsidered for cause" in a bankruptcy case. 11 U.S.C.S. §502(j). Section 502(j) further states that "a reconsidered claim may be allowed or disallowed according to the equities of the case." Id. There is no definition of "for cause" or "according to the equities of the case," but the courts have generally held that reconsideration ultimately "lies within the discretion of the court." This article will analyze the scenarios under which a bankruptcy court in …

Debtors Entitled To Only Prospective Relief For Extra Trustee Fees Paid Under Unconstitutional Amendment To Section 1930 Trustee Fee Statute, Joseph Parone

Bankruptcy Research Library

(Excerpt)

The United States Trustee Program comprises eighty-eight of the ninety-four Federal judicial districts. The U.S. Trustee Program is funded through the United States Trustee System Fund, a large portion from debtor trustee fees. U.S. Trustee districts are required to implement the trustee fee structure outlined by the Section 1930 fee statute, which is updated through congressional amendment. However, the Judicial Conference, which oversees the Bankruptcy Administrator Program, had discretion to impose trustee fees outlined in section 1930 on debtors within the remaining six Federal judicial districts under their administration.

In the backdrop of this legislative scheme is the Uniformity …

U.S. Court’S Role In Approving The Sale Of U.S. Assets In A Chapter 15 Case, Jamie Vang

Bankruptcy Research Library

(Excerpt)

Chapter 15 cases deal with cross-border insolvency and allow U.S. courts to recognize foreign bankruptcy proceedings and cooperate with foreign courts. Upon recognition of a foreign main proceeding, section 363 of title 11 of the United States Code (the "Bankruptcy Code") will apply to the transfer of U.S. assets. However, the standard for approving a sale under section 363 in a chapter 15 case is not specified.

This article analyzes the bankruptcy court decisions on whether chapter 15 requires U.S. courts to conduct their own individual analysis or to defer to the foreign court in approving the sale of …