Bankruptcy Law Commons^™

Consumer Bankruptcy Panel: Undue Hardship: An Analysis Of Student Loan Debt Discharge In Bankruptcy, C. Ray Mullins, Dalié Jiménez, Rafael Pardo, Elaine Poon

Emory Bankruptcy Developments Journal

The Consumer Panel focused on student loan debt, featuring judicial, academic, and practical insights and a call to action to help consumers.

Condemning A Residential Mortgage Loan: Is It An Extraterritorial Taking?, Michael M. Sandez

American University Business Law Review

No abstract provided.

Postdefault Interest Rates In Bankruptcy, David G. Carlson

Articles

This Article shows that as Bankruptcy Code section 506(b) is currently written, postdefault interest rates are prohibited when the default is an “ipso facto event” — a filing for bankruptcy or insolvency as the event of a default. Yet some courts have insisted on postdefault interest in situations reinstating a loan agreement and have been ignoring restrictions on pendency interest to permit oversecured creditors from obtaining penalty rates of interest. This Article argues that those holdings violate section 506(b) and Supreme Court precedent. It begins with an analysis of ipso facto defaults, showing that the Bankruptcy Code prohibits ipso facto …

Motions To Withdraw The Reference - An Empirical Study, Laura B. Bartell

Law Faculty Research Publications

No abstract provided.

Derivatives And Collateral: Balancing Remedies And Systemic Risk, Steven L. Schwarcz

Faculty Scholarship

U.S. bankruptcy law grants special rights and immunities to creditors in derivatives transactions, including virtually unlimited enforcement rights. This Article examines whether exempting those transactions from bankruptcy’s automatic stay, including the stay of foreclosure actions against collateral, is necessary or appropriate in order to minimize systemic risk.

Implementing Symmetric Treatment Of Financial Contracts In Bankruptcy And Bank Resolution, E. J. Janger, John A.E. Pottow

Articles

Financial contracts come in many forms and serve many functions in both the financial system and the broader economy. Repos secured by U.S. Treasury securities act as money substitutes and can play an important role as part of the money supply, while similarly structured repos, secured by more volatile collateral, may be used as speculative devices or hedges. Swaps can be used to insure against various types of market risk, from interest rates to oil prices, or they can operate as vehicles for highly leveraged investments. The parties to these instruments are sometimes major financial institutions and, other times, ordinary …

Consent: Its Scope, Blips, Blemishes, And A Bekins Extrapolation Too Far (Keynote Address), Hon. Thomas B. Bennett

Campbell Law Review

No abstract provided.

A Traditionalist's Take On Bankruptcy Intersections, Stephanie Ben-Ishai

Articles & Book Chapters

No abstract provided.

Review Of Sovereign Defaults Before International Courts And Tribunals, John A. E. Pottow, Emily Iversen

Reviews

This book review probes Michael Waibel’s new book, Sovereign Defaults Before International Courts and Tribunals. Waibel's project is ambitious, exploring international attempts to address sovereign defaults over the past century and a half. Through painstaking and comprehensive historical analysis, Waibel shows how we've been here before -- a sober reminder for those thinking Argentina is simply part of a new fad in financial default. With the UN now turning its attention to sovereign debt issues, this study is especially timely. Although somewhat disappointing in the lightness of its normative content, the book should nevertheless prove helpful to those considering the …

The Least “Constructive” Provisions?: Analyzing The Bankruptcy Code’S Codified Canons, Asher Hawkins

NYLS Law Review

No abstract provided.

Bankruptcy And Education, Keith Sharfman

Faculty Publications

(Excerpt)

Bankruptcy law interacts with education law in a number of respects. A bankrupt educational institution loses access to student financial aid, and its accreditation status is excluded from the bankruptcy estate. Actions by accreditation agencies against bankrupt educational institutions are not subject to the automatic stay. And absent a showing of undue hardship, student loans are not dischargeable in bankruptcy.

The exceptional treatment of educational institutions and their students in bankruptcy reflects a fundamental tension between the goals of bankruptcy law on the one hand and education policy on the other. While bankruptcy law generally seeks to maximize value …

Liquidity, Systemic Risk, And The Bankruptcy Treatment Of Financial Contracts, Rizwaan J. Mokal

Brooklyn Journal of Corporate, Financial & Commercial Law

No abstract provided.

Grassroots Shareholder Activism In Large Commercial Bankruptcies, Diane Lourdes Dick

Faculty Articles

In early 2013, a group of similarly situated individuals gathered to discuss how they could defend themselves against a grave potential injustice. Time was of the essence, so they would need to act quickly to preserve their rights. Fortunately, their path to justice was already paved: the matter was pending in federal court, and each had standing to appear and be heard. But frustratingly, this seemingly well-paved path was barred to them. These individuals, who were technically parties to the proceeding, were virtually invisible to the court and largely disenfranchised in settlement negotiations. Striving to overcome these obstacles, they persisted …

Secured Credit In Religious Institutions' Reorganizations, Pamela Foohey

Scholarly Works

Scholars increasingly assume that most businesses enter Chapter 11 with a high percentage of secured debt, which leads to a high percentage of cases ending in the sale of the debtor’s assets under section 363 of the Bankruptcy Code rather than with confirmation of a reorganization plan. However, evidence and discussions about “the end of bankruptcy” center on secured creditors’ role in the reorganizations of very large corporations. The few analyses of cross-sections of Chapter 11 proceedings suggest that secured creditor control is not nearly as omnipresent as asserted and that 363 sales are not as dominant as assumed.

This …

When Faith Falls Short: Bankruptcy Decisions Of Churches, Pamela Foohey

Scholarly Works

What does a church do when it is about to go bust? Religious organizations, like any business, can experience financial distress. Leaders could try to solve their churches’ financial problems on their own. Perhaps leaders do not view the problems as addressable with law. Or perhaps they do not think, as a moral or spiritual matter, that they should resort to the legal system, such as bankruptcy, to deal with their churches’ inability to pay its debts. Yet about ninety religious organizations seek to reorganize under the Bankruptcy Code every year. This Article relies on interviews with forty-five of these …

The Uncertain Future Of The Unfinished Business Doctrine, Dan Teplin

Bankruptcy Research Library

(Exceprt)

It is no secret that the legal industry has experience financial difficulty following the great recession. Many law firms have been less profitable, and in some extreme circumstances, have filed for bankruptcy. The worlds largest law firms are of no exception to this recent phenomenon. The collapses of the mega-firms Dewey & LeBoeuf, Coudert Brothers LLP, Heller Ehrman LLP, Howrey LLP, Thacher Proffitt & Wood LLP, and Thelen LLP are prime examples.

Since most law firms, especially large firms, do not reorganize in bankruptcy, a bankruptcy trustee will often be appointed to administer the firm’s estate. In order to …

The Nature Of A Parent-Subsidiary Relationship Determines How To Allocate A Refund In A Tax Sharing Agreement, Samuel Cushner

Bankruptcy Research Library

(Excerpt)

Often, a parent corporation and its subsidiaries will file a consolidated tax return because it comes with many benefits, such as being able to offset gains and losses and deferring tax consequences for sales between consolidated groups. The parent corporation and the subsidiaries will often enter into a tax sharing agreement, which will determine each entity’s respective tax liability. In the event that a refund is issued, the tax sharing agreement will usually dictate how to allocate the refund amongst the parent and the subsidiaries.

A tax sharing agreement is “an agreement among members of an affiliated group of …

Second Circuit Sets A Low Bar For Foreign Debtors Seeking Chapter 15 Relief, Samantha Ruppenthal

Bankruptcy Research Library

(Excerpt)

Continued globalization of trade and investment led Congress, through the Bankruptcy Abuse Prevention and Consumer Protection Act (“BAPCPA”), to amend the Bankruptcy Code (“the Code”) in 2005 to include chapter 15. Chapter 15 adopted UNCITRAL’s Model Law on Cross-Border Insolvency —both aim to guide parties through cross-border insolvency proceedings. In addition to the policy objectives for all bankruptcies, chapter 15 specifically aspires to foster cooperation between the United States and foreign countries involved in cross-border insolvency cases and promote greater legal certainty in global trade and investment. A chapter 15 case is generally meant to supplement the plenary case …

Equitable Subordination- Where Is Applies, What It Does, And The Implications That Result, Lauren Casparie

Bankruptcy Research Library

(Excerpt)

Equitable subordination, as permitted under section 510(c)(1) of the Bankruptcy Code, provides the court the ability to reorganize creditor’s debt in the light of any inequitable conduct. The code gives courts the ability to subordinate the level of priority of a creditor’s claim in light of any inequitable conduct committed by that creditor. This remedy is applied in cases where the creditor has acted in an inequitable manner, causing injury or creating unjust positions for other creditors. This remedy is remedial, not punitive, and limited only to the extent necessary to remedy the damage caused by the wrongdoing creditor. …

Whether Undistributed Chapter 13 Payment Plan Funds Held By A Chapter 13 Trustee Should Be Distributed To The Debtor Or The Debtor’S Creditors After Conversion From Chapter 13 To Chapter 7, Rosa Aliberti

Bankruptcy Research Library

(Excerpt)

Qualified individuals seeking to reorganize their debts may file under Chapter 13 of the Bankruptcy Code. Under chapter 13, a debtor makes payments according to a court approved payment plan, which is administered by a chapter 13 trustee, and remains in possession of all the property of the estate. Once a debtor makes all his payments under the chapter 13 payment plan, he has a right to seek a discharge, provided that he meets certain requirements. These requirements include that the debtor: (1) certifying that he paid all domestic support obligations prior to the certification being made; (2) received …