Context Of Bankruptcy Research Articles

La mediación concursal, especialidad de la mediación civil y mercantil

The Insolvency Act contains a preconcursal mediatorial figure, the court procedure of payments, which allows citizens and legal persons, whether or not employers, to agree an agreement that allows the viability of personal and professional activity. This rule includes many specialties for the mediation process and even allows the transformation of the role of mediator into administrator, creating a hybrid figure appropriate for the specific context of bankruptcy.

State Bankruptcy from the Ground Up

After a brief, high profile debate, proposals to create a new bankruptcy framework for states dropped from sight in Washington in early 2011. With the debate’s initial passions having cooled, at least for a time, we can now consider state bankruptcy, as well as other responses to states’ fiscal crisis, a bit more quietly and carefully. In this Article, I begin by briefly outlining a theoretical and practical case for state bankruptcy. Because I have developed these arguments in much more detail in companion work, I will keep the discussion comparatively brief. My particular concern here is, as the title suggests, on developing a bankruptcy framework from the ground up. After briefly discussing what bankruptcy is, and some of the confusion befogging this term, I will argue that state bankruptcy should emphasize five key objectives, an approach I will compare to two possible alternatives. I then will consider six facets of the bankruptcy case: initiation; proposing a reorganization plan; the role of a stay, reachback provisions and confirmation rules; the possibility of “guillotines” or “checks” tailored to the state bankruptcy context; financing; and the structure of the bankruptcy court.

Securities Class Actions and Bankrupt Companies

Though the Enron and WorldCom cases were the focus of much attention, very little is known about the subset of securities class actions involving bankrupt companies. The context of bankruptcy should be interesting to scholars of securities litigation because it includes the cases where shareholders suffer the greatest harm. The resolution of securities class actions where a bankrupt company is the issuer may shed light on the way in which context affects how parties and courts assess the merit of lawsuits. There are two competing views as to the relationship between bankruptcy and securities fraud. Companies approaching bankruptcy have greater incentives to commit fraud in order to save the company or the jobs of managers. There thus might be a causal relationship between bankruptcy and securities fraud. On the other hand, the context of bankruptcy could lead parties and judges to more readily assume that fraud was present in bankrupt companies. This perception could reflect hindsight bias, the tendency to overestimate the predictability of events, leading to the conclusion that management knew of the danger of bankruptcy but failed to disclose it. This study assesses the relationship between bankruptcy and securities fraud by analyzing a data set of 1,466 consolidated class actions filed from 1996 to 2004, of which 234 (approximately 16%) cases involved a company that was in bankruptcy during the pendency of the class action (“bankruptcy cases”). The study tests two hypotheses: (1) bankruptcy cases are more likely to have actual merit than cases where the issuer is not bankrupt (“non-bankruptcy cases”); and (2) bankruptcy cases are more likely to be perceived as having merit than non-bankruptcy cases, even if they do not necessarily have more merit.

Transaction Avoidance in Bankruptcy of Corporate Groups

The complex business structure of corporate groups has many legislative challenges. One such issue is the operation of avoidance provisions in the bankruptcy context. The paper investigates this matter focusing on the recent recommendations made by UNCITRAL in this area. The paper unearths the underlying principles of the new proposals against the backdrop of the “entity law” versus “enterprise law” debate (regarding groups regulation) and the general goals of bankruptcy laws, as well as considers the extent to which these proposals are desirable. The paper also discusses the relationship between avoidance provisions and other solutions for the bankruptcy of groups and the problems which arise where multiple jurisdictions are affected by voidable transactions.

You've Got Your Mother's Laugh: What Bankruptcy Mediation Can Learn from the Her/History of Divorce and Child Custody Mediation

Due to our current deep economic woes, growing bankruptcy filings, and apparent legislative unwillingness to expand the number of judges, bankruptcy courts are exploring the use of mediation to help resolve adversary proceedings, negotiate elements of reorganizations, and deal with claims that cannot be heard directly in bankruptcy proceedings. In addition, mediation advocates have been consistent in urging greater use of the process to reduce debtors’ and claimants’ costs, bridge the jurisdictional and standing challenges that bankruptcies can pose, and offer claimants the opportunity to be heard and determine their own resolution of claims. At this point, the relatively few judicial opinions currently available that discuss bankruptcy mediation demonstrate that bankruptcy courts generally favor the use of mediation to resolve claims and help with reorganizations. The cases also reveal, however, that some parties are attempting to use mediation to achieve unexpected and potentially inappropriate results and that bankruptcy judges, parties and/or their lawyers apparently expect mediators to do much more than facilitate the parties’ communication, negotiation and resolution. Sometimes, for example, judicial opinions reveal an assumption that mediators will make decisions – both procedural and substantive – and that in reviewing these decisions, judges should grant substantial deference to the mediators. Cases such as these suggest that the repeat players within bankruptcy do not understand how the role of the mediator is supposed to diverge in significant ways from the “traditional neutral” roles of trustee, special master, magistrate, arbitrator, examiner or judge. Though an appropriate response would appear to be education of the repeat players involved in bankruptcies, these cases also may signal that mediation will not always be the most appropriate vehicle for resolving issues within, or related to, bankruptcy. Instead, it may be that bankruptcy courts should both incorporate mediation in appropriate cases and consider expanding the availability or functions of “traditional neutrals”. In the bankruptcy context, that might mean experimenting with the use of trustees and examiners in innovative procedures that include, as one part of the procedures, facilitation of dialogue and consensual resolution. Importantly, bankruptcy courts would need to ensure that both trustees and examiners receive training in facilitation skills and procedures that will help them manage this new function appropriately and achieve both procedural and substantive justice. Though divorce and child custody matters may seem far-removed from bankruptcy proceedings, liquidations and reorganizations bear some intriguing superficial similarities to divorces and ongoing custody and support arrangements (perhaps better termed “familial reorganizations” for purposes of this Article). In addition, an examination of the use, abuse and evolution of mediation in this area of practice may prove useful for those who are now introducing mediation into bankruptcy. For example, some commentators have recently begun advocating for a more limited use of divorce and child custody mediation, in part due to the emergence of new, hybrid dispute resolution models that confound any bright line distinction between consensual and adjudicative approaches. This Article begins to suggest options that would permit bankruptcy courts, repeat players within the system and their clients to skip a couple of the stages that were involved in the evolution of divorce and child custody mediation, provided there is willingness to consider the lessons of others’ history (or as this Article’s title suggests, “her/history”).

Constructive Strict-Approach to Attorney-Client Privilege in Bankruptcy: Lack of Clarity in Rule 502 Makes Its Application to Bankruptcy Unclear

Electronic discovery (e-discovery) creates issues that are fundamentally different from the issues associated with paper discovery.' In response to these differences, the United States Congress promulgated the 2006 Amendments to the Federal Rules of Civil Procedure. These amendments address a number of problems associated with e-discovery; however, they do not address many of the specific problems associated with the attorney-client privilege that arise from large amounts of electronically stored information (ESI).2 The United States House of Representatives Committee on Rules of Practice and Procedure proposed Rule 502 of Evidence (Rule 502) to address these issues. Rule 502 addresses the effects of inadvertent disclosures in discovery, and whether those inadvertent disclosures operate as waivers of the attorney-client privilege. Unfortunately, the proposed rule does not address many of the intricate situations that are present in every bankruptcy case. This Note first examines broadly the scope of ESI and e-discovery and their effect on the legal field. Next, it discusses generally the attorney- client privilege and how waiver occurs. Then this Note analyzes Rule 502 and how it addresses several problems attorneys currently face with waiver of the attorney-client privilege in e-discovery. Then, it shows how Rule 502 does not address two specific problems in the bankruptcy context. Finally, it will offer attorneys a few suggestions to insure that the client's attorney-client privilege is preserved.

In Defense of Credit Default Swaps

This paper is for the most part a refutation of the works of Hu and Black on the incentives created by credit default swaps in the bankruptcy context. We show that Hu and Black's concerns over empty voting and negative economic interest in the bankruptcy context are entirely without merit.

Understanding Lockups: Effects in Bankruptcy and the Market for Corporate Control

The article investigates the effects of lockups, devices used to compensate unsuccessful bidders. Lockups are relevant in contexts in which sales have auction-like characteristics. Bankruptcy and the market for corporate control are two such situations, since the governing legal regimes prevent sales from being swiftly consummated and require sellers to take the most favorable offer that emerges during the waiting period. Existing scholarship has considered lockups in both areas. The analysis of lockups in the market for corporate control is fairly well developed. This article shows that it is importantly incomplete because it fails both to distinguish between ex ante and ex post analysis of lockups and to apply the auction theory developed by economists. The bankruptcy scholarship lags behind the analysis of mergers and acquisitions and is even less satisfactory. After developing the correct picture of lockups in mergers and acquisitions, the article applies it to the bankruptcy context, showing how differences in the appropriate goals require different standards for courts reviewing lockups.

Timing Matters: Promoting Forum Shopping by Insolvent Corporations

Most commentators decry forum shopping. This general hostility extends to forum shopping by firms filing for bankruptcy. Indeed, Congress is considering legislation designed to reduce forum shopping by companies filing for bankruptcy. This article makes two contributions to this debate. First, we show that the current debate is driven almost exclusively by attorneys trying to protect fees rather than by any principled objection to forum shopping. Second, on the merits, we argue that the hostility to forum shopping is misplaced. The near universal condemnation of forum shopping rests on the premise that, at the time the plaintiff selects a forum, there is a zero-sum game between the plaintiff and defendant - every advantage that a plaintiff secures comes at a cost to the defendant. We demonstrate that, in the bankruptcy context, this zero-sum game disappears if one forces a firm to commit to a specific venue before its seeks funds in the capital markets. Drawing on the race to the top literature in corporate law, we show that markets will discipline managers who act opportunistically. The threat of this discipline will lead managers to commit to the venue most likely to maximize firm value. Moreover, our proposal will create incentives for judges to exercise the vast discretion that the Bankruptcy Code gives them in a way which promotes efficiency.

The US Bankruptcy Courts' Failure to Interpret the New York Convention as a Treaty Obligation

FOR OVER 200 years the US has evidenced its international agreements in treaties which are ratified after the Senate has given its advice and consent. During that time, the federal courts have interpreted those treaties according to established tenets of construction which are aimed, in part, at avoiding federal court intervention in US foreign policy making. It may come as a surprise, therefore, to discover that, for the past 19 years, federal courts have apparently forgotten their constitutionally limited role when called upon to decide questions concerning conflicts between the Bankruptcy Code and the New York Convention on the Recognition and Enforcement of Arbitral Awards. In that context, the courts have given themselves a wide discretion in deciding whether or not to enforce agreements for foreign arbitration. Much of the fault may lie with the parties' counsel, who have often failed to address the issue properly. The practical result has been the elevation of the Bankruptcy Code over that of the Law of Nations.1 The New York Convention was ratified by the US in 1970 in order to encourage the recognition and enforcement of international arbitration awards. In 1978, Congress enacted the Bankruptcy Code, which does not refer to the New York Convention in its text or legislative history. As a matter of statutory construction, a Treaty will not be deemed to have been abrogated or modified by a later federal statute unless such a purpose has been clearly and unequivocally expressed.2 Prior to the enactment of the Bankruptcy Code, federal courts had given cognizance to the New York Convention in a bankruptcy context. In the Second Circuit Court of Appeals decision In re Fotochrome Inc. ,3 decided under the former Bankruptcy …