Bankruptcy Law Commons^™

How Absolute Is The Absolute Priority Rule In Bankruptcy? The Case For Structured Dismissals, Bruce Grohsgal

William & Mary Business Law Review

This Article challenges the view that the absolute priority rule applies to a “structured dismissal” in a chapter 11 bankruptcy case, namely a court-approved settlement of certain claims by or against the debtor followed by the dismissal of the case. Under that view, the bankruptcy court cannot approve a settlement that makes a distribution to holders of junior claims unless it also provides for payment of all senior claims in full. The Supreme Court considered the question in the fall of 2016 in Czyzewski v. Jevic Holding Corp. (In re Jevic Holding Corp.). The question before the Court is: “Whether …

Consumer Bankruptcy, Nondischargeability, And Penal Debt, Abbye Atkinson

Vanderbilt Law Review

This Article examines the issue of categorically nondischargeable debts in the Bankruptcy Code. These debts are excepted from discharge ostensibly because they indicate that the debtor incurred the debt through some misconduct, there is an important public policy at play that requires the debt to be excepted from discharge, or a discharge of certain state-imposed debts raises federalism concerns. Using penal debt as its lens, this Article critiques these analytical frames, arguing that they do not do much work to help explain why some debts are treated as categorically nondischargeable while others that seem to implicate the same concerns are …

Law And Legislation In Municipal Bankruptcy, Vincent S.J. Buccola

Cardozo Law Review

Corporate and consumer bankruptcy are defined by two principal features: a compulsory process and an identifiable set of priorities to debtor property. These "rule of law"features reduce borrowing costs ex ante by, among other things, discouraging rent-seeking ex post. Municipal bankruptcy, by contrast, despite apparent similarities, embodies a radically different vision of debt adjustment. Substantive priorities in Chapter 9 are riddled with uncertainty, and the very invocation of bankruptcy is subject to veto by multiple actors. Consequently, this Article contends that familiar models of bankruptcy are inadequate to explain the existing regime of municipal debt adjustment. What Chapter 9 creates …

Jaminan Dan Agunan Dalam Pembiayaan Bank Syariah Dan Kredit Bank Konvensional, Ifa Latifa Fitriani

Jurnal Hukum & Pembangunan

If we look into the collateral and additional collateral concept in conventional banking and Islamic banking, it has different fundamental background and principle. Collateral in conventional banking system appears due to the position and condition of the creditor-debitor relationship. The relationship has implicedto present the legal obligation of collateral things according to Article 1131 Book of Civil Law in every credit transaction. Islamic banking system has taken the consept of collateral from Rahn and kafalah, eventhough the reality shows the practice of collateral and additional collateral still using legal collateral norm of Indonesia’s positive law sistem that based on Westren …

How Many #Followers Do You Have?: Evaluating The Rise Of Social Media And Issues Concerning In Re Ctli’S Determination That Social Media Accounts Are Property Of The Estate, Patricia A. Leeson

Catholic University Law Review

With the rise of social media use, legal disputes have surfaced with litigants looking to the courts to determine issues of ownership and legal authority. As a matter of first impression, a U.S. Bankruptcy Court in Texas held that a Twitter and Facebook social media account were to be regarded as property of the estate pursuant to Section 541 of the Bankruptcy Code. The court analogized the social media accounts to subscriber lists because they provide valuable access to customers. Although the court addressed the question of whether social media applications are to be regarded as property in bankruptcy proceedings, …

Rethinking Criminal Contempt In The Bankruptcy Courts, John A. E. Pottow, Jason S. Levin

Law & Economics Working Papers

A surprising number of courts believe that bankruptcy judges lack authority to impose criminal contempt sanctions. We attempt to rectify this misunderstanding with a march through the historical treatment of contempt-like powers in bankruptcy, the painful statutory history of the 1978 Bankruptcy Code (including the exciting history of likely repealed 28 U.S.C. § 1481), and the various apposite rules of procedure. (Fans of the All Writs Act will delight in its inclusion.) But the principal service we offer to the bankruptcy community is dismantling the ubiquitous and persistent belief that there is some form of constitutional infirmity with "mere" bankruptcy …

Debt Collection ‘Versus’ Consumer Protection: The Fdcpa’S Prohibition On False Representations Of The Legal Status Of Debt, Sara Brenner

Bankruptcy Research Library

(Excerpt)

The Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692, has dramatically changed the landscape of debt collection for both consumers and debt collectors. Prior to the enactment of the FDCPA, state common law governed informal debt collection, and abusive collection practices were pervasive. Debt collectors were incentivized to engage in abusive collection tactics and consumers had little recourse. As a result, the FDCPA was enacted in order to regulate consumer debt collection and to remedy abuse. The express purpose of the FDCPA is to “protect consumers against debt collection abuses” and to ensure that debt collectors who …

The Possibility Of Discharging Student Loan Debt And Assessing The Differing Standards Applied By The Courts, Maria Casamassa

Bankruptcy Research Library

(Excerpt)

Discharging student loan debt under the United States Bankruptcy Code (the “Bankruptcy Code”) is more difficult than attempting to discharge other types of debt. Although discharging student loan debt is not a simple hurdle to surpass, it is possible in certain circumstances. Under the Bankruptcy Code, student loan debt may not be discharged “unless excepting such debt from discharge . . . would impose an undue hardship on the debtor and the debtor's dependents . . . .” The Bankruptcy Code does not define undue hardship. Congress “left it up to the various Bankruptcy Courts to utilize their discretion …

Delaware Bankruptcy Court Creates Vendor-Friendly Forum By Preserving Reclamation Rights In The Face Of Dip Lenders’ Liens, Dean Katsionis

Bankruptcy Research Library

(Excerpt)

Reclamation is the right of a vendor “to recover possession of goods delivered to an insolvent buyer.” This right is codified in section 2-702 of the Uniform Commercial Code as adopted in each of the several states. Where an insolvent buyer has filed for bankruptcy after receiving goods on credit, section 546(c) of title 11 of the United States Code (the “Bankruptcy Code”) affords the vendor of those goods a remedy in reclamation. In the event an insolvent buyer in bankruptcy has disposed of the goods subject to reclamation, the bankruptcy court may grant the vendor a lien or …

Ability To Avoid Successor Liability Pursuant To A §363 Sale In Bankruptcy, Julie Lavoie

Bankruptcy Research Library

(Excerpt)

In a case filed under chapter 11 of title 11 of the United States Code (“the Bankruptcy Code”), the company entering bankruptcy, the debtor, usually files a reorganization plan that articulates how the debtor’s assets will be addressed and creditors will be treated. Once a plan is confirmed and becomes effective, the debtor “emerges from bankruptcy with its liabilities restructured along certain parameters.” This process, however, can take years. Conversely, a sale of substantially all of the debtor’s assets, pursuant to 11 U.S.C. § 363, will often “occur on a very expedited basis.” In the case of the GM …

Confirmed Bankruptcy Plan Supersedes Applicable Finra Rules, Derek Piersiak

Bankruptcy Research Library

(Excerpt)

In the United States, the Financial Industry Regulatory Authority (“FINRA”) is authorized by the SEC to adopt and administer the Uniform Practice Code (“UPC”), the rules governing secondary market securities transactions. UPC Rule 1140 determines which unitholders are entitled to a distribution by setting a record date and an ex-date. The record date is the date fixed by the issuer for the purpose of determining which holders of securities are entitled to receive dividends or other distributions. A debtor can also set a record date in their bankruptcy plan. The ex-date is set by FINRA and is “the date …

A Lender’S Knowledge Of Alleged Breaches Of Fiduciary Duties Shall Not Be Imputed Upon Debtors In A Statute Of Limitations Analysis, Michael Derosa

Bankruptcy Research Library

(Excerpt)

Section 541 of the United States Bankruptcy Code (the “Code”) provides in part that the debtor’s estate includes “all legal or equitable interests of the debtor in property as of the commencement of the case.” The debtor’s interests include “whatever causes of action the debtor may have possessed prior to the petition date.” In certain circumstances, a creditor may obtain the right to bring claims of the debtor. In such a case, generally the creditor is stepping into the shoes of the debtor, and the creditor is subject to all defenses proffered by the defendant that would apply had …

The Nondischargeability Of Government Cleanup Orders, Christina Mavrikis

Bankruptcy Research Library

(Excerpt)

One of the primary purposes of title 11 of the United States Code (the “Bankruptcy Code”) is to provide debtors with a financial fresh start. Upon the filing of a bankruptcy petition by or against the debtor, section 362(a) of the Bankruptcy Code provides that all entities are barred from actions to collect, assess, or recover any pre-petition claims against the debtor. In general, the automatic stay serves to halt any pending legal proceedings against the debtor so that the pre-petition claims can be managed and discharged by the bankruptcy court. There are, however, exceptions to the automatic stay. …

Not My Client, Not My Problem: The Duty Of Attorneys To Non-Clients, Daniel Quinn

Bankruptcy Research Library

(Excerpt)

Pursuant to the Professional Code of Responsibility, lawyers owe a certain legal duty to their clients throughout the span of their representation. In certain circumstances this duty can be extended to non-clients. The issue of liability to non-clients was recently addressed following the actions of Mayer Brown, LLP (“Mayer Brown”), and the resulting malpractice suit filed against Mayer Brown which was based upon Mayer Brown’s inadvertent termination of certain liens granted by General Motors (“GM”) in favor of J.P. Morgan Chase (“JPM”). Specifically, the allegations of misconduct arose form actions in connection with a loan and the related “Term …

Limiting The Scope Of The Value Defense Under 11 U.S.C. § 548(C) In Avoidance Litigation, Allison Smalley

Bankruptcy Research Library

(Excerpt)

Today, most people are aware of, or have at least heard of, the notorious Bernard Madoff Ponzi scheme. Other than the scheme originally perpetrated by Charles Ponzi in the 1920s, the man whom the scheme was named after, the elaborate Madoff Ponzi scheme has become one of the most infamous fraudulent schemes of our time. Bernard Madoff operated this scam using newly deposited customer funds to support the business and make “profit” payments to older customers who then withdrew these “profits,” which were in excess of the principal amounts they invested. Essentially, there were no actual profits being made; …

Section 546(E) Safe Harbor Defense: When To Utilize And When To Preclude, Amanda Tersigni

Bankruptcy Research Library

(Excerpt)

The Bankruptcy Code allows trustees and debtors-in-possession to invoke certain provisions of the United States Bankruptcy Code (“Bankruptcy Code”) to “avoid” particular types of transfers. The types of transfers that a debtor can “avoid” are defined rather broadly. However, one significant exception to this “avoidance power” is section 546(e) and its safe harbor defense. Courts have often wrestled with how to settle the meaning of section 546(e) and how to define the boundaries of the provision’s safe harbor defense. First and foremost, it is important to note that Congress enacted section 546(e) as the safe harbor defense statute in …

Rediscovering The Bankruptcy And Insolvency Power: Political And Constitutional Challenges To The Bankruptcy Act, 1919-1929, Thomas G. W. Telfer

Law Publications

No abstract provided.

Bankruptcy Beyond Status Maintenance, Govind Persad

Sturm College of Law: Faculty Scholarship

This Article examines the tendency of current American bankruptcy law to maintain the social and economic status of middle- and upper-class debtors while doing much less to assist poorer debtors and non-debtors. In doing so, it examines and categorizes various aspects of statutory and case law that allow debtors to preserve their prior economic status. After reconstructing and rebutting the normative arguments offered in defense of these provisions, it suggests a proposal for reforming bankruptcy law to emphasize goals other than the maintenance of economic status. Part I of the Article begins by describing ways in which current bankruptcy law …

Golden Creditors, Copper Rules: An Analysis Of Avoidance Actions Under Section 544(B) Of The Bankruptcy Code In Cases Where A Federal Creditor Holds A Claim, John F. Rabe Jr.

Brooklyn Law Review

Section 544(b) of the Bankruptcy Code endows the trustee with the power to avoid fraudulent transfers that an unsecured creditor could have avoided under applicable law. Most states have adopted versions of the Uniform Fraudulent Conveyances Act (UFCA) or Uniform Fraudulent Transfers Act (UFTA) that impose four- or six-year statutes of limitations on private creditors seeking to unwind fraudulent transfers. Certain government creditors, however, have access to longer statutes of limitation than those available to their private counterparts. Federal creditors acting pursuant to the Federal Debt Collection Procedures Act (FDCPA) or Internal Revenue Code (IRC), for example, can avail themselves …

The Apps For Justice Project: Employing Design Thinking To Narrow The Access To Justice Gap, Lois R. Lupica

Faculty Publications

The lack of available resources to make civil justice available to all, coupled with the fact that existing strategies fail to account for the research on cognitive capacity and other deployment challenges faced by the poor, explain in large part why a high percentage of low-income individuals facing legal problems fail to take action to respond to their legal problems. Such a failure to respond in a timely fashion to a nascent legal problem can lead to an escalation of the initial problem and the emergence of new ones.

The access-to-justice community has begun to respond to this intensifying crisis …