Bankruptcy Law Commons^™

The Lehman Brothers Bankruptcy G: The Special Case Of Derivatives, Rosalind Z. Wiggins, Andrew Metrick

Journal of Financial Crises

When it filed for bankruptcy protection in September 2008, Lehman Brothers was an active participant in the derivatives market and was party to 906,000 derivative transactions of all types under 6,120 ISDA Master Agreements with an estimated notional value of $35 trillion. The majority of Lehman’s derivatives were bilateral agreements not traded on an exchange but in the over-the-counter (OTC) market. Because derivatives enjoyed an exemption from the automatic stay provisions of the U.S. Bankruptcy Code, parties to Lehman’s derivatives could seek resolution and self-protection without the guidance and restraint of the bankruptcy court. The rush of counterparties to novate …

The Lehman Brothers Bankruptcy F: Introduction To The Isda Master Agreement, Christian M. Mcnamara, Andrew Metrick

Journal of Financial Crises

When Lehman Brothers Holdings, Inc. (LBHI) sought Chapter 11 protection, the more than 6,000 counterparties with which its subsidiaries had entered into over 900,000 over-the-counter (OTC) derivatives transactions faced the question of how best to respond to protect their interests. The existence of standardized documentation developed by the International Swaps and Derivatives Association (ISDA) for entering into such transactions meant that the counterparties likely thought that they were dealing with a well-defined and robust set of options in answering this question. Yet, in practice, the resolution of Lehman’s OTC derivatives portfolio ended up being less orderly than the existence of …

The Lehman Brothers Bankruptcy E: The Effects On Lehman’S U.S. Broker-Dealer, Rosalind Z. Wiggins, Andrew Metrick

Journal of Financial Crises

Lehman’s U.S. broker-dealer, Lehman Brothers Inc. (LBI), was excluded from the parent company’s bankruptcy filing on September 15, 2008, because it was thought that the solvent subsidiary might be able to wind down its affairs in a normal fashion. However, the force of the parent’s demise proved too strong, and within days, LBI and dozens of Lehman subsidiaries around the world were also in liquidation. As a regulated broker-dealer, LBI was required to comply with the Securities and Exchange Commission financial-responsibility rules for broker-dealers, including maintaining customer assets separately. However, the corporate complexity and enterprise integration that characterized the Lehman …

The Lehman Brothers Bankruptcy A: Overview, Rosalind Z. Wiggins, Thomas Piontek, Andrew Metrick

Journal of Financial Crises

On September 15, 2008, Lehman Brothers Holdings, Inc., the fourth-largest U.S. investment bank, sought Chapter 11 protection, initiating the largest bankruptcy proceeding in U.S. history. The demise of the 164-year old firm was a seminal event in the global financial crisis. Under the direction of its long-time Chief Executive Officer Richard Fuld, Lehman had been very successful pursuing a high-leverage, high-risk business model that required it to daily raise billions of dollars to fund its operations. Beginning in 2006, Lehman began to invest aggressively in real-estate-related assets and soon had significant exposures to housing and subprime mortgages, just as these …

Puerto Rico V. Franklin California Tax-Free Trust, Brittney E. Ciarlo

Ohio Northern University Law Review

No abstract provided.

Bankruptcy, Morality & Student Loans: A Decade Of Error In Undue Hardship Analysis, Linn White

Ohio Northern University Law Review

In an effort to stem perceived abuses of the bankruptcy system, Congress adopted a rule in 1976 that created a time-based conditional limitation on the discharge of federally guaranteed student loans in bankruptcy. The only means of overcoming the limitation was the showing of an “undue hardship,” which was undefined by the legislature. This gave rise to two judicially created, means-based tests that were used to determine if the debtor was attempting to abuse the bankruptcy system. By the time the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA) was enacted, the time-based restriction was gone, leaving only …

Venezuela Undermines Gold Miner Crystallex's Attempts To Recover On Its Icsid Award, Sam Wesson

Loyola of Los Angeles International and Comparative Law Review

No abstract provided.

Event Program, Emory Bankruptcy Developments Journal

Emory Bankruptcy Developments Journal Symposia & Workshops

The Sixteenth Annual

EMORY BANKRUPTCY DEVELOPMENTS JOURNAL SYMPOSIUM

February 21, 2019 | 8:00 a.m. to 1:00 p.m. | Tull Auditorium

Table Of Contents, Seattle University Law Review

Seattle University Law Review

No abstract provided.

Clarifying The Scope Of The Self-Incrimination Clause: City Of Hays V. Vogt, Samantha Ruben

Chicago-Kent Law Review

Three months after oral arguments, the Supreme Court dismissed the writ of certiorari in City of Hays v. Vogt as improvidently granted. The question in Vogt was whether the Fifth Amendment right against self-incrimination is violated when incriminating statements are used at a probable cause hearing, as opposed to a criminal trial. As a result of the “DIG,” the Court left a circuit split unresolved surrounding the meaning of a “criminal case” within the Fifth Amendment’s Self-Incrimination Clause.

This note argues that the Supreme Court should not have dismissed Vogt and should have decided that the Fifth Amendment right against …

Puerto Rico Debt Restructuring: Origins Of A Constitutional And Humanitarian Crisis, Elizabeth Whiting

University of Miami Inter-American Law Review

No abstract provided.

Bankruptcy Law: Explaining Bankruptcy Forum Shopping, Jared A. Ellias

The Judges' Book

No abstract provided.

Modern Waste Law, Bankruptcy, And Residential Mortgage, Jill M. Fraley

Scholarly Articles

Around the time of the subprime mortgage collapse, lenders began in earnest to sue borrowers by adapting the traditional law of waste. Today, these claims continue to rise in frequency and to expand to more jurisdictions. Lender waste claims provide a “work around” for state mortgage laws that prohibit personal deficiency judgments after foreclosure and are potentially non-dischargeable in bankruptcy.

While a recent wave of scholarship has addressed the problems of how the bankruptcy system handles mortgages, scholars have not yet explored the use of waste actions by lenders and how waste judgments intersect with bankruptcy and foreclosure. Using new …

Stern Claims And Article Iii Adjudication - The Bankruptcy Judge Knows Best, Laura B. Bartell

Law Faculty Research Publications

No abstract provided.

Under A Confirmed Chapter 11 Plan A Liquidating Trustee May Have Sole Authority To Review And Object To Claims, Ryan C. Beil

Bankruptcy Research Library

(Excerpt)

A liquidating trust is one that is organized for the primary purpose of liquidating and distributing the assets transferred to it. When a plan under chapter 11 of title 11 of the United States Code (the “Bankruptcy Code”) is confirmed and establishes a liquidating trust, the trust is treated as a distinct entity. The liquidating trust terminates the debtor in possession’s status and conveys the estate’s rights and assets to a “liquidating trustee.” The confirmed plan does not simply substitute the trustee for the debtor-in-possession, but rather it creates a separate and distinct trust, holding certain property of the …

A Non-Profit Entity May Not Be Substantively Consolidated With An Affiliated Debtor, Rachel Armely

Bankruptcy Research Library

(Excerpt)

To date, over 19,000 sexual abuse claims, totaling claims in an aggregate amount of more than $4 billion, have been filed against individual dioceses within the Catholic Church. This influx of claims comes as the result of certain state legislatures allowing individuals with previously time-barred claims to bring civil lawsuits against the dioceses. Consequently, at least eighteen Catholic dioceses have filed voluntary petitions for relief under title 11 of the United States Code (the “Bankruptcy Code”).

In many cases, the majority of the Catholic dioceses’ assets are held by inter-related, non-profit Catholic entities that often collectively hold billions of …

Involuntary Bankruptcy Cases And Discretionary “For Cause” Dismissals, Jp Amato

Bankruptcy Research Library

(Exceprt)

This article addresses whether a bankruptcy court has the discretionary power to dismiss an involuntary bankruptcy case filed under chapters 7 or 11 of title 11 of the United States Code (the “Bankruptcy Code”) for cause when there is a finding of bad faith or a lack of good faith on behalf of the petitioning creditor or creditors. In short, it is unclear because there is insufficient authority on this issue in the involuntary context, and the issue remains split among the courts in the voluntary context.

This article first addresses the statutory requirements of an involuntary petition. Next, …

Foreign Third-Party Releases May Be Enforced Under Principles Of Comity, Jennifer Delasco

Bankruptcy Research Library

(Excerpt)

Chapter 15 of title 11 of the United States Code (the “Bankruptcy Code”) provides a mechanism for a foreign debtor or a foreign representative to seek recognition of a foreign insolvency, liquidation, or bankruptcy proceeding and the enforcement of a foreign court’s orders issued in such proceedings in the United States. A foreign bankruptcy proceeding or plan may contain “provisions that release non-debtors, such as officers, directors, shareholders, or non-debtor affiliates, from claims and causes of action held by creditors or other non-debtor parties.” There is a split in the United States courts as to whether such a third-party …

Chapter 7 Bankruptcy Proceedings May Be Sufficiently “Unusual” To Render Forum-Selection Clauses Unenforceable, James A. Goodridge

Bankruptcy Research Library

(Excerpt)

The strong policy in favor of centralizing bankruptcy disputes in a single forum often overrides the deference typically owed to the enforceability of the enforceability of forum-selection clauses (“FSC”). As such, with the exception of the Seventh and Tenth Circuits, FSCs are less likely to be enforced in bankruptcy cases, especially when the pending claim is constitutionally core. This memorandum explores the treatment of FSCs in bankruptcy cases. Section I discusses bankruptcy courts’ strong presumption for centralized proceedings; Section II examines the treatment of FSC when the matter is core; and Section III reviews the rejection of the “core …

The Standard For Taking A Security Interest In Fixtures, Mark J. Lobiondo

Bankruptcy Research Library

(Excerpt)

Creditors that have a security interest in the same collateral will often dispute the priority of each other’s liens. In general, the security interest that is first perfected will be entitled to priority over subsequent liens. A security interest is generally perfected by filing a financing statement that satisfies the requirements of section 9-502 of the UCC. Section 9-502 provides that a financing statement is sufficient only if it: (1) provides the name of the debtor; (2) provides the name of the secured party or a representative of the secured party; and (3) indicates the collateral covered by the …