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Volume 48 Masthead, Seattle University Law Review

Seattle University Law Review

Volume 48 Masthead

Creditors, Shareholders, And Losers In Between: A Failed Regulatory Experiment, Albert H. Choi, Jeffery Zhang

Articles

In the aftermath of the 2007–08 Global Financial Crisis, regulators encouraged many of the world’s largest banks to hold a new type of regulatory instrument with the goal of improving their safety and soundness. The regulatory instrument was known as a “CoCo,” short for contingent convertible bond. CoCos are neither debt nor equity. They are something in between, designed to give the bank a shot in the arm during times of stress. Many of the largest international banks have issued CoCos worth hundreds of billions of dollars. After more than ten years—a decade that includes the collapse of Credit Suisse …

Seizing Welfare From The Bankrupt, Michael D. Sousa

University of Cincinnati Law Review

The earned income tax credit (EITC) is currently the largest means-tested antipoverty program in the United States that assists low-income working families surviving along the edges of poverty. A central component of the national welfare system, the EITC has lifted millions of families with children out of poverty and has produced myriad benefits for their everyday lives. But most of the poor and near-poor endure in the low-wage labor market and often lead turbulent financial lives, plagued by precarious employment along with deleterious material and psychological constraints in budgeting for daily expenses. For the segment of these families also burdened …

The 2023 Banking Turmoil: Lessons For Eu Resolution Authorities, Niccolò Cirillo, Francesco Pennesi, Sebastiano Laviola

Journal of Financial Crises

The March 2023 banking turmoil in the United States and Switzerland marked the most significant banking stress in financial markets since the 2007–2009 Global Financial Crisis, prompting a reevaluation of prudential and resolution frameworks. This paper explores whether the 2023 events offer preliminary lessons for resolution authorities within the European Union (EU).

Policymakers often struggle to restore confidence in financial systems and contain the repercussions of financial instability. While the 2023 crises in the US and Switzerland underscored this difficulty, authorities largely managed to mitigate the most severe consequences. Nonetheless, some issues in bank crisis management were identified. This paper …

Beyond The Equity Power Of Bankruptcy Courts: Toxic Tort Liabilities In Chapter 11 Cases, Kaighn Smith

Maine Law Review

In 1982, three asbestos product manufacturers filed voluntary petitions for business reorganization under Chapter 11 of the United States Bankruptcy Code. The common reason for each of these filings was that tort liabilities threatened the financial survival of the corporation. Never, in the history of United States bankruptcy law, had any business sought bankruptcy relief for such a reason. By 1985, two more firms, another asbestos product manufacturer and a pharmaceutical company, filed Chapter 11 petitions for the same reason. The torts of these "debtors" in bankruptcy are similar; they extend from the manufacture and wide-spread marketing of products that …

The Waiver Problem In Maine Real Property Foreclosure Law: A Commercial Paper Perspective, Dennis M. Patterson

Maine Law Review

When a mortgagee accepts from a mortgagor payment of part of a mortgage arrearage, does the mortgagee then waive its right to foreclose? Many bank counsel will say that the mortgagee does waive its right to foreclose, and they will point for authority to the broad holding of Savings & Loan Association of Bangor v. Tear. In that decision, the Maine Supreme Judicial Court, sitting as the Law Court, seemed to hold that a mortgagee waives its right to foreclose if it accepts tender of a late payment. This broad interpretation of the Savings & Loan decision has proven to …

Loosen Up: The Follies Of Strict Construction As Applied To A Statutory Tribal Sovereign Immunity Waiver, Joseph M. Raimondi

St. John's Law Review

(Excerpt)

On February 9, 2020, Brian Coughlin attempted suicide, leading to an eleven-day stint at the hospital. He was experiencing “overwhelming stress, anxiety and lack of hope for a better life.” He had recently filed for bankruptcy, which normally triggers a stay that prevents creditors from engaging in “any act to collect, assess, or recover a claim against the debtor . . . .” However, one of Coughlin’s creditors, associated with a Native American tribe —the Lac Du Flambeau Band of Lake Superior Chippewa Indians (“the Band”)—believed that it did not have to comply with the stay by virtue of …

Untangling Bankruptcy’S Most Complex Web: Chapter 11 Rule 1111(B) And Subchapter V, Evan Sponder

Brooklyn Journal of Corporate, Financial & Commercial Law

The United States Code Section 1111(b) provides an equitable remedy to debt restructuring for both debtors and creditors in Chapter 11 bankruptcy by allowing the debtor to retain their income-producing assets and repay their creditor(s) through a mutually approved plan. However, section 1111(b) is difficult for courts to apply due to its complex nature, and infrequent application of the section has resulted in limited development of case law interpreting the section. Courts currently interpret 1111(b) elections in Chapter 11 Subchapter V cases to exclude interest accrual; this interpretation establishes an inequitable precedent whereby debtors’ procedural advantages bypass creditor protections during …

Crypto Failure In The Shadows, Kara J. Bruce

Villanova Law Review (1956 - )

No abstract provided.

The Constitutional Meaning Of Financial Terms, Tomer Stein, Shelby Ponton

Utah Law Review

The Constitution has sixty-three financial terms. These financial terms include, for instance, “compensation,” “expenditures,” “debt,” “coin,” “revenue,” “securities,” and “bankruptcies”—all of which determine the elementary building blocks of our governmental makeup. When the Supreme Court interprets the meaning of these financial terms, it does so in isolation and without a consistent framework. This Article proposes a unified framework for the interpretation of financial terms in the Constitution which comprises two fundamental canons of construction.

First, this Article proposes that all financial terms in the Constitution should be interpreted with fiscal and monetary neutrality—interpreting financial terms in a way that does …

The Supreme Court Sack[Ler]S Third-Party Releases In Chapter 11: Should Congress Seize The Cudgel?, Lawrence Ponoroff

William & Mary Law Review Online

On June 27, 2024, the Supreme Court issued its ruling in Harrington v. Purdue Pharma L.P., holding that nonconsensual third-party releases included in a Chapter 11 plan of reorganization, other than one relating to asbestos liability claims, were impermissible under the federal Bankruptcy Code. The releases at issue would have immunized members of the Sackler family, who controlled Purdue Pharma, from liability in connection with the company’s role in the opioid crisis. The Sacklers represent the epitome of the unpopular litigant, so no tears need be shed for them. In a sense, they just received a dose of their …

Reimagining Bankruptcy For Cryptocurrency Platforms: Frameworks To Protect Cryptocurrency Investors, Natalia Plichta

Chicago-Kent Law Review

No abstract provided.

When The Bank Wants Its Borrower In Bankruptcy: Benefits Of Bankruptcy For Lenders And Lender Liability Defendants, David C. Hillman, Matthew L. Caras

Maine Law Review

Bankruptcy features such as the automatic stay and the avoidance powers have traditionally caused lenders to look with disfavor upon the commencement by a borrower of a case under the Bankruptcy Code and have caused lenders to consider only as a last resort the alternative of exercising their right to commence an involuntary bankruptcy against a borrower. Yet circumstances exist where lenders might obtain substantial benefits and advantages from dealing with a problem loan in the context of a borrower's bankruptcy case, particularly in light of the increasing number of lender liability lawsuits that have been initiated during the past …

Maine Debtor-Creditor Law By Dennis M. Patterson, David J. Jones

Maine Law Review

Dennis M. Patterson, Esquire, has written a brief, practical guide to selected areas of collection practice entitled Maine Debtor-Creditor Law. Two immediate observations come to mind: first, that I plan to keep a copy of the book in my office library for future reference; second, that I am disappointed that the author omitted reference to several challenging issues that confront the attorney having a regular collection or foreclosure practice. This latter observation is both an indication of the usefulness of the book's treatment of the areas covered and a hopeful invitation to the author to expand on his subject matter …

A Reply To David Jones, Dennis M. Patterson

Maine Law Review

During my years of practice in Maine, I had the pleasure of litigating most of the issues discussed in my book, Maine Debtor-Creditor Law, with many members of Maine's fine commercial and bankruptcy law bar. Among the lawyers with whom I litigated these questions is David Jones. In fact, one of the cases we litigated, a particularly thorny foreclosure action, was the impetus of an article that became portions of two of the chapters in my book. It is against this background that I was pleased to learn that one of my old adversaries from practice had agreed to review …

Tactical Restructurings, Diane Lourdes Dick

Fordham Law Review

The traditional legal account of a corporate debtor’s journey into and through bankruptcy reorganization naturally focuses on legal rights and entitlements, such as obligations arising under the debtor’s existing agreements and rights articulated in the U.S. Bankruptcy Code. But the traditional legal account does little to probe why these prior agreements and transactions were entered into in the first place, and how they interact with the bankruptcy system to generate predictable outcomes. Rather, the traditional legal account applies a presumption that the debtor’s financial characteristics, qualities, and features (what this Article calls “restructuring attributes”) are not premeditated, at least insofar …

Surviving Lender Violence: The Case For Resuscitating Contractual Good Faith In New York, Zachary T. Hanusek

Fordham Law Review

In recent years, lender violence has become the preferred term for a rapidly developing restructuring market centered on the premise that a subset of lenders in a syndicate can increase their own recovery prospects at the expense of the remaining lenders in their group by engaging in a so-called “liability-management transaction.” This term evokes images of rival factions of corporate lenders engaging in physical combat. Although these hyper-technical restructurings certainly fall short of the barbarity the label suggests, the reality is that lenders participating in the so-called violence can siphon hundreds of millions of dollars away from nonparticipating lenders and …

Basic Bankruptcy Training For General Tax Practitioners, Walter E. Afield, Robb Longman, Alexander E. Schmidt

Faculty Publications By Year

No abstract provided.

The Small Business Prepack: How Subchapter V Paves The Way For Bankruptcy’S Fastest Cases, Christopher D. Hampson, Jeffrey A. Katz

UF Law Faculty Publications

America has long styled itself as a place where entrepreneurs can dream big and—if things go well—make it big too. But when small businesses fail, does the American bankruptcy system provide a real opportunity to preserve value and try again? For decades, bankruptcy professionals, judges, and lawmakers have tried various approaches to small business bankruptcies, none of which seemed to work particularly well. But in 2019, Congress passed the Small Business Reorganization Act (the “SBRA”), one of the most significant amendments to the Bankruptcy Code in a generation. As practitioners, scholars, and judges work out the contours of the rules, …

Pertanggungjawaban Jaminan Perorangan (Personal Guarantee) Dalam Kepailitan: Studi Kasus Putusan Nomor 6/Pdt.Sus-Pailit/2020/Pn.Niaga.Jkt.Pst., Yasmin Ghaisani Sya'bina, Togi Marolop Pangaribuan

Lex Patrimonium

Agreement as a personal guarantee places oneself in a quite risky position. As regulated in Article 1820 of the Civil Code, a personal guarantee is obligated to pay off the debts of a debtor who fails to pay their debts. However, in carrying out the agreement, a personal guarantee is given a privilege based on Article 1831 of the Civil Code in the form of the right to demand execution of the principal’s beforehand. Furthermore, Article 1832 paragraph (1) of the Civil Code which regulates the relinquishment of personal guarantee’s privilege indicated the possibility of personal guarantee being …