In re Frenville: A Critique by the National Bankruptcy Conference's Committee on Claims and Distributions

2016-01-01

The Third Circuit, in In re M. Frenville Co.,1 addressed a number of fundamental bankruptcy issues. Through its expansive reasoning, the decision presents the potential for widespread influence beyond the facts of the case. This article summarizes the decision in Frenville, illustrates the unfortunate consequences of its holding in subsequent cases following Frenville, and provides a critique of the decision, demonstrating its flawed reasoning.

Legislative History of the New Bankruptcy Law

The Institutional Repository at DePaul University (DePaul University) · 2015-01-01 · 2 citations

In 1978, a new federal bankruptcy law was enacted.Problems of statutory interpretation will undoubtedly arise with respect to this law.In an attempt to assist the legal community in solving such problems,

Recalibrating Consent in Bankruptcy

SSRN Electronic Journal · 2010-02-02 · 4 citations

In bankruptcy, business realities collide with legal rules that themselves create conflicting rights. Unsurprisingly, accommodations are made. Consent bridges gaps among conflicting legal rules and business realities, justifying pragmatic solutions to problems that could not otherwise be imposed under prevailing legal rules. Consent’s transformative power is so essential to the bankruptcy process, that resort to consent, in principle and in rhetoric, is reflexive in bankruptcy. Manufacturing consent to support practical accommodations, rather than simply mirroring prebankruptcy entitlements, is at the heart of bankruptcy law as it has evolved in the United States. Bankruptcy uses a panoply of tools to generate consent: inertia, ambiguity, proxies, relaxed standards for establishing consent, novel procedures and institutional structures, and new substantive rights. New circumstances in the twenty-first century, and the teachings of experience, require close reexamination of how consent operates in bankruptcy, including whether certain consent requirements should be further relaxed or tightened. We critique current consent standards and practices in connection with (i) home mortgage modification; (ii) the one-consenting-class rule; (iii) sale free and clear orders; (iv) third-party releases; (v) sales of substantially all assets; (vi) balloting of conflicted parties; and (vii) proxy consents by official creditors’ committees. Recently, most notoriously in the restructurings of Chrysler and General Motors, the advantages of reaching solutions by manufacturing consent rather than imposition have been too casually abandoned.

CORPORATE BANKRUPTCY REORGANIZATIONS: ESTIMATES FROM A BARGAINING MODEL∗ BY HULYA

2008-01-01

This article uses a novel approach to measure the unobserved liquidation value of a firm that relies on the information contained in the allocations that are agreed upon in Chapter 11 negotiations. I estimate a game theoretic model that captures the influence of liquidation value on the equilibrium allocations using a newly collected data set. I find that the liquidation values are higher when the industry conditions are more favorable, and the real interest rates are higher. I use the estimated model to conduct a counterfactual experiment to quantitatively assess the impact of a mandatory liquidation on the equilibrium allocations.

American Bankruptcy Law Journal: Editor's Note

Berkley Law Scholarship Repository (University of California, Berkeley) · 2008-12-01

Bankruptcy and the Supreme Court

2008-01-01 · 2 citations

After 7 years, Ken Klee has completed his book on Bankruptcy and the United States Supreme Court. This 6 chapter book is a comprehensive desk reference for lawyers, judges, and scholars examining the Supreme Court's bankruptcy decisions from 1898 through 2008 from six different perspectives. Chapter 1 examines the Court as a governmental and political institution devoting attention to the Court's business and habits, i.e., the processes by which the Court receives bankruptcy cases and decides them and the rules it promulgates to regulate bankruptcy courts and practice. Chapter 2 looks at how the Court tends to resolve conflicts between bankruptcy law and other areas of state and federal law, such as administrative law, family law, labor law, pension law, probate law, real estate law, and tax law. This discussion is linked closely to Chapter 3 which discusses the constitutional breadth of the bankruptcy power and analyzes how the Court reconciles bankruptcy law with constitutional law, sovereign immunity, federal preemption, and federalism, as well as the use of state law in bankruptcy. Chapter 4 discusses the Court's treatment of the bankruptcy court as a judicial institution. In particular, it examines how the Court has sculpted and restricted the bankruptcy court's subject matter jurisdiction, powers of the bankruptcy court, and res judicata and collateral estoppel effects of bankruptcy court and non-bankruptcy court judgments. Chapter 5 analyzes, in considerable detail, bankruptcy law, doctrine, and policies that arise primarily or exclusively of the context of the Bankruptcy Code, such as avoiding powers, dischargeability, claims priority and distribution, and plan confirmation.Chapter 6 discusses some of the bankruptcy cases over the past 111 years in which the Court sharply changed the course of bankruptcy law. It also includes some favorite cases, regardless of their impact on bankruptcy law or doctrine.

Debate - Resolved: The 1978 Bankruptcy Code Has Been a Success

2004-01-01

On the occasion of the 25th anniversary of the Bankruptcy Reform Act of 1978, Professors Brubaker and Klee present a stylized debate about the success of the Bankruptcy Code, both with respect to business bankruptcies and consumer bankruptcies.

Buenos plazos para los negocios, ¿malos para las inversiones?

Gestión · 2003-01-01

Teaching Transactional Law

SSRN Electronic Journal · 2003-01-01 · 4 citations

One Size Fits Some: Single Asset Real Estate Banktruptcy Cases

eYLS (Yale Law School) · 2002-12-31 · 2 citations

For several years a debate has raged over whether single asset real estate cases should be singled out for special treatment under the Bankruptcy Code.Under the current $4 million debt cap, these cases involve apartment houses and small office buildings.But both Houses of Congress have passed legislation that will repeal the $4 million cap, potentially subjecting large office buildings, shopping centers, and perhaps hotels to expedited discriminatory treatment in Chapter 11 reorganization cases.In this Article, Professor Klee attempts to inform the debate by presenting empirical data gathered from a national questionnaire and cross-checking the data against the case files of a bankruptcy judge in the most active judicial district in the country.The results are striking.Asset values rather than amounts owing stand out as reliable predictors of plan confirmation.Surprisingly, value-to-loan ratios are less reliable than asset values standing alone.The data show that valuable properties have a much greater probability of confirming a plan than less valuable properties.The Article suggests that if Congress desires to discriminate against single asset real estate debtors, it should draw the line at approximately $7-$8.2 million in asset value rather than changing current law to discriminate against all single asset real estate debtors.