Bankruptcy Law Commons^™

Countering Misinformation In The Health Care System: The Case For Stricter Regulations Within Health Insurance Provider Directories, Jaclyn Kleban

Cardozo Law Review

No abstract provided.

Obduskey V. Mccarthey & Holthus Llp: Declining To Distinguish Between Judicial And Non-Judicial Foreclosure In Furtherance Of The Fdcpa’S Mission, Moshe Y. Gugenheim

Proxy

No abstract provided.

Pleading Fraudulent Conveyances: Federal Vs. New York State Requirements, Tara Guarino

Bankruptcy Research Library

(Excerpt)

Fraudulent conveyances are transfers of a debtor’s property made to defraud, burden, and unfairly place the property out of reach of the creditor. Such transfers are illegal and therefore prohibited under both federal and New York State law. Federal fraudulent conveyance law, the United States Bankruptcy Code (the “Bankruptcy Code”), recognizes two different types of fraudulent conveyances: intentional (“actual”) fraudulent transfers and constructive fraudulent transfers. Each of these fraudulent transfers require different pleading standards. These two types of fraud are recognized in New York, as well. If these fraudulent conveyances can be proven, both federal and state law allow …

A District Court May Not Enjoin Third-Party Claims Against Insurers In A Securities-Fraud Receivership Without Alternative Compensation Scheme, Justin Henderson

Bankruptcy Research Library

(Excerpt)

Within its equitable power, a district court may place the assets of a defendant into receivership and appoint a receiver to protect a plaintiff’s interest in property where the rights over that property are disputed. In general, the purpose of this equity receivership is to marshal assets, preserve value, equitably distribute to creditors, and, either reorganize, or orderly liquidate. This power is an extraordinary remedy only justified by extreme situations, such as where there is a high probability that fraudulent conduct has occurred or will occur to frustrate the claim, or when there is a threat that the disputed …

Exempt Assets May Not Be Considered When Determining If Student Loan Should Be Discharged, Kayla Mistretta

Bankruptcy Research Library

(Excerpt)

Student loans are presumptively non-dischargeable under title 11 of the United States Code (the “Bankruptcy Code”). The Bankruptcy Code, however, provides that a debtor may rebut the presumption and be discharged from student loans if the debtor can prove that excepting the debt from discharge would cause “undue hardship” on the debtor or the debtor’s dependents. Proving undue hardship is a “formidable task” for a debtor, but not an impossible one. The Bankruptcy Code does not define undue hardship and does not provide bankruptcy courts with any guidance on how to evaluate it. Accordingly, Congress has given bankruptcy courts …

Bankruptcy Courts Are Largely Unavailable To Cannabis-Related Debtors But Not Off-Limits, Cameron Purcell

Bankruptcy Research Library

(Excerpt)

Although title 11 of the United States Code (the “Bankruptcy Code”) does not explicitly prohibit cannabis businesses from filing for bankruptcy, there are many hurdles that continue to preclude cannabis industry participants from obtaining bankruptcy relief. Chapter 11 of the Bankruptcy Code provides a debtor with an opportunity to reorganize its financial affairs in order to continue to operate while providing the fair and equitable distribution among creditors. When the continuation of the debtor’s business is not viable, chapter 7 of the Bankruptcy Code provides a court-supervised procedure for liquidating the debtor’s assets to pay creditors. Under both forms …

Pension Trusts Should Not Be Considered Business Trusts For The Purpose Of § 109 Of The Bankruptcy Code And Thus Not Eligible To Be A Debtor Under The Bankruptcy Code, Danielle Ullo

Bankruptcy Research Library

(Excerpt)

Qualifying as a debtor is the first eligibility requirement for bankruptcy protection under the United States Bankruptcy Code (the “Code”). Failure to satisfy the requirements to be a qualifying debtor forecloses an entity from obtaining bankruptcy relief. Thus, it is crucial that qualifying debtor categories are defined and delineated, particularly for business entities for whom debtor status is not always so clear.

Section 109 of the Code includes “business trust[s]” as a party entitled to bankruptcy relief but excludes other trusts from that definition. While the Code is clear to exclude ordinary trusts from eligibility to be a debtor, …

The Enforceability Of Arbitration Agreements In Bankruptcy Throughout The United States, Laila Rizk

Bankruptcy Research Library

(Excerpt)

Bankruptcy courts have historically been opposed to the use of arbitration in settling controversies in which a trustee was involved unless both parties agreed. The distrust of the bankruptcy system stemmed from a string of Supreme Court decisions that refused to compel arbitration. Following the introduction of the Federal Arbitration Act in 1925, there has been a slow move towards embracing arbitration by the bankruptcy courts in non-core matters. However, there has been pushback by the bankruptcy courts in enforcing arbitration clauses in core matters that are fundamental to a bankruptcy case.

In determining whether to enforce an arbitration …

Bringing Relevance Back To Consumer Bankruptcy, Nathalie Martin

Faculty Scholarship

The Seventeenth Annual Emory Bankruptcy Developments Journal Symposium

This Paper presumes that readers want to make bankruptcy more useful for consumers and for society as a whole. If this is true, we need to ask two questions: first, what do individual consumers hope to get out of the system, and second, what does society hope to get out of the system?

Part I of this Paper discusses the increase in debt over the last two decades, the growing wage and income gap, growing debt inequality and race, and the fall of the CFPB, all justifications for using the bankruptcy system …

Chasing The Fruits Of Misery: Confronting The Historical Relationships Between Opioid Revenues, Offshore Financial Centers, And International Regulatory Networks, Stephen C. Wilks

Northwestern Journal of International Law & Business

As the opioid crisis continues to claim lives throughout the U.S., tort litigants have faced challenges pursuing Purdue Pharma – one of the drug makers responsible for aggressively promoting OxyContin while downplaying the drug’s addictive effects. Much of this litigation posture sought to recover billions in public health costs incurred responding to the crisis at federal, state and local levels. As the plaintiff class grew, Purdue Pharma petitioned for bankruptcy protection, at which point auditors discovered the entity’s beneficial owners had caused it to wire billions in opioid profits into offshore accounts – placing them beyond the reach of litigants. …

In Memory Of Professor James E. Bond, Janet Ainsworth

Seattle University Law Review

Janet Ainsworth, Professor of Law at Seattle University School of Law: In Memory of Professor James E. Bond.

Table Of Contents, Seattle University Law Review

Seattle University Law Review

Table of Contents

Loopholes For The Affluent Bankrupt, David R. Hague

Faculty Articles

Recent bankruptcy cases are exposing a problem. Affluent individuals filing for bankruptcy are treated more favorably under the Bankruptcy Code than those debtors with little to no means of financial sustenance or income. Did Congress intend this result? The legislative history is unclear. But one thing seems certain: The United States Bankruptcy Code contains a set of loopholes that appear to be designed for the well-to-do segment of society. Courts throughout the United States are either overlooking these provisions or simply condoning their utilization under the defensible conviction that the Bankruptcy Code permits it.

In this Article, I argue that …

A No-Contest Discharge For Uncollectible Student Loans, Brook E. Gotberg, Matthew Bruckner, Dalie Jimenez, Chrystin Ondersma

Faculty Publications

Over forty-four million Americans owe more than $1.6 trillion in student loan debt. This debt is nearly impossible to discharge in bankruptcy. Attempting to do so may require costly and contentious litigation with the Department of Education. And because the Department typically fights every case, even initial success can be followed by years of appeals. As a result, few student loan borrowers attempt to discharge their student loan debt in bankruptcy.

In this Article, we call on the Department of Education to develop a set of ten easily ascertainable and verifiable circumstances in which it will not contest a debtor’s …

Giving Back A Fraudulent Transfer: A Defense To Liability?, David G. Carlson

Articles

In Whitlock v. Lowe (In re Deberry) (5th Cir. 2019), the Fifth Circuit court of appeals found it obvious that if a transferee gives back fraudulently transferred funds (which the debtor then dissipates), the transferee has a complete defense to liability to the transferor’s bankruptcy trustee. This puts the Fifth Circuit at odds with the Sixth and Seventh Circuits, where the prepetition give-back counted as no defense. This article concludes that a more nuanced position should mediate between these extremes, based on an “innocent donee” defense retrieved from Nineteenth Century precedent. The article emphasizes that if bad faith transferees for …

Tuition As A Fraudulent Transfer, David G. Carlson

Articles

Bankruptcy trustees are suing universities because the insolvent parent of an adult student has written a tuition check while insolvent. The theory is that the university is the initial transferee of a fraudulent transfer that has provided benefit to the student but not to the parent debtor. This article claims that the university is never the initial transferee of tuition dollars. Rather, the student is. Where the university has no knowledge of parent insolvency, the university can count educating the student as a good faith transfer for value, thus immunizing the university from liability. The unpleasant side effect is that …

The New Small Business Bankruptcy Game: Strategies For Creditors Under The Small Business Reorganization Act, Christopher G. Bradley

Law Faculty Scholarly Articles

Most unsecured creditors have little incentive to act energetically in bankruptcy proceedings. They are unlikely to be paid enough to make it worth the effort. Our bankruptcy law allocates much more power to debtors and to secured claimants. This Article suggests that the Act further erodes the position of most unsecured creditors. Their expected recoveries will remain too low to justify anything other than a relatively passive attitude toward the bankruptcy proceeding, and the Act lowers the protections for passive creditors.

Part I provides an overview of the major features of the Act. It explains how a subchapter V case …

Restructuring Vs. Bankruptcy, Jason Roderick Donaldson, Edward R. Morrison, Giorgia Piacentino, Xiaobo Yu

Faculty Scholarship

We develop a model of a firm in financial distress. Distress can be mitigated by filing for bankruptcy, which is costly, or preempted by restructuring, which is impeded by a collective action problem. We find that bankruptcy and restructuring are complements, not substitutes: Reducing bankruptcy costs facilitates restructuring, rather than crowding it out. And so does making bankruptcy more debtor-friendly, under a condition that seems likely to hold now in the United States. The model gives new perspectives on current relief policies (e.g., subsidized loans to firms in bankruptcy) and on long-standing legal debates (e.g., the efficiency of the absolute …

For Coöperation And The Abolition Of Capital, Or, How To Get Beyond Our Extractive Punitive Society And Achieve A Just Society, Bernard E. Harcourt

Faculty Scholarship

In hindsight, the term "capitalism" was always a misnomer, coined paradoxically by its critics in the nineteenth century. The term misleadingly suggests that the existence of capital produces a unique economic system or that capital itself is governed by economic laws. But that's an illusion. In truth, we do not live today in a system in which capital dictates our economic circumstances. Instead, we live under the tyranny of what I would call "tournament dirigisme": a type of state-directed gladiator sport where our political leaders bestow spoils on the wealthy, privileged elite.

We need to displace this tournament dirigisme with …

The Proceduralist Inversion–A Response To Skeel, Edward Janger, Adam J. Levitin

Faculty Scholarship

No abstract provided.