Bankruptcy Law Commons^™

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 …

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 …

Consumer Credit In America: Past, Present, And Future (Introduction), Pamela Foohey, Jim Hawkins, Creola Johnson, Nathalie Martin

Scholarly Works

In September 2016, in conjunction with Law & Contemporary Problems at Duke University School of Law, we organized a symposium on Consumer Credit in America. We sought to assess the state of consumer credit in America — to review and examine its recent history, to consider arguments for and against regulation, and to discuss the potential for future innovation. This is the introduction to the volume of articles coming out of that symposium.

Cracking The Code: An Empirical Analysis Of Consumer Bankruptcy Outcomes, Sara Sternberg Greene, Parina Patel, Katherine M. Porter

Faculty Scholarship

Chapter 13 is a cornerstone of the bankruptcy system. Its legal requirements strike a balance between the rehabilitation of debtors through keeping assets and reducing debt, and the repayment of creditors over a period of years. Despite the accolades from policymakers, the hard truth is that the majority of the half-million families each year that seek refuge in chapter 13 bankruptcy will not achieve the debt relief of a discharge. Prior research found that those who drop out of bankruptcy quickly endure the serious financial struggles that they had before bankruptcy—now even worse off for having spent thousands of dollars …

Puerto Rico And The Netherworld Of Sovereign Debt Restructuring, Mitu Gulati, Robert K. Rasmussen

Faculty Scholarship

Puerto Rico has incurred debt well beyond its ability to repay. It attempted to address its fiscal woes through legislation allowing the restructuring of some its debt. The Supreme Court put a stop to this effort, holding that Congress in the Bankruptcy Code barred the Commonwealth from enacting its own restructuring regime. Yet all agreed that the Bankruptcy Code did not provide anything in its place. While Congress quickly enacted PROMESA in an attempt to address the Puerto Rico’s fiscal ills, we explore in this paper whether Congress has the power to bar Puerto Rico from enacting a restructuring mechanism …

"No Money Down" Bankruptcy, Pamela Foohey, Robert M. Lawless, Katherine Porter, Deborah Thorne

Articles by Maurer Faculty

This Article reports on a breakdown in access to justice in bankruptcy, a system from which one million Americans will seek help this year. A crucial decision for these consumers will be whether to file a chapter 7 or chapter 13 bankruptcy. Nearly every aspect of their bankruptcies — both the benefits and the burdens of debt relief — will be different in chapter 7 versus chapter 13. Almost all consumers will hire a bankruptcy attorney. Because they must pay their attorneys, many consumers will file chapter 13 to finance their access to the law, rather than because they prefer …

The Cerebral Hercules And The Bankruptcy Hydra: How Judge Schermer Slayed A Multi-Headed Monster While Deep In The Heart Of Texas (And What Any Of This Lone Star State-Grecian Hero Analogy Has To Do With Just A Little Bit Of Yiddish), Charles E. Rendlen Iii, Abigail B. Willie

Faculty Articles

Part I is written from the perspective of Judge Rendlen as a colleague of Judge Schermer and discusses Judge Schermer's contributions as a mediator in the Chapter 11 mega-case of In re U.S. Fidelis, Inc. ("U.S. Fidelis").' Part II is written from the perspective of Mrs. Willie, who has known Judge Schermer as her professional mentor and personal friend for more than a decade, and discusses how the U.S. Fidelis mediation is a reflection of Judge Schermer, the man.

When Social Enterprises Fail, Jonathan Brown

Elisabeth Haub School of Law Faculty Publications

This Article identifies the conflicts between social enterprise legislation and bankruptcy law and presents a normative argument for a legal regime that would harmonize the two. Focusing on benefit corporations, the most widely adopted social enterprise form, this Article observes that existing law leaves uncertainty as to the role of directors at a time of financial distress and will produce outcomes that are at odds with the core goals of social enterprise legislation. Then, drawing on academic proposals for contract-based systems of bankruptcy, this Article argues that just as a firm may opt out of a corporate governance norm of …

Bankruptcy, Honorable Harlin D. Hale, Amber M. Carson

SMU Annual Texas Survey

No abstract provided.

The Effect Of Bankruptcy Stay On A Subsequently Filed Appeal, Heather Kolinsky

UF Law Faculty Publications

No abstract provided.

Disciplinary Legal Empiricism, Lynn M. Lopucki

UF Law Faculty Publications

This Article reports on an empirical study of one hundred and twenty empirical legal studies published in leading, non-peer-reviewed law reviews and in the peer-reviewed Journal of Empirical Legal Studies. The study is the first to compare studies by disciplinary empiricists – defined as Ph.D. holders – with those by non-disciplinary empiricists – defined as J.D. holders who are not also Ph.D. holders. Three differences identified in the study suggest that Ph.D. hiring is on a collision course with the demands of legal educators, the organized bar, and students that the law schools better prepare students for practice. First, disciplinary …