Source: http://law.emory.edu/ebdj/content/volume-34/issue-2/index.html
Timestamp: 2019-04-19 00:39:48+00:00

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On February 22, 2018, the Emory Bankruptcy Developments Journal hosted its Fifteenth Annual Symposium. Each year, the Journal seeks to highlight and address timely bankruptcy topics that will engage academics, practitioners, and students alike. This year’s Symposium featured a consumer bankruptcy panel and a corporate bankruptcy panel. The Consumer Panel explored access to consumer bankruptcy and the Corporate Panel discussed the Supreme Court’s recent Jevic case.
A discussion by this year’s Corporate Panel on the Supreme Court’s recent decision in Czyzewski v. Jevic Holding Corp. This discussion was led by Leah Fiorenza McNeill of Bryan Cave Atlanta, Alexandra Dugan of Bradley Arant Boult Cummings LLP, Monique D. Hayes of Goldstein & McClintock, and Katie Good of Whiteford Taylor & Preston.
In this Essay, Professor Pamela Foohey of the Indiana University Maurer School of Law, examines the state of access to justice in the context of consumer bankruptcy. As with the use of any legal remedy, before turning to bankruptcy, people first must recognize the relevancy of law, the legal system, and bankruptcy to help solve their financial problems. This aspect of access to bankruptcy is the least researched, despite being critical to the ultimate delivery of bankruptcy’s “fresh start.” This piece explores some of the complex causes of the relative dearth of consumer bankruptcy filings by examining CFPB records and other empirical data.
Professors Kara Bruce of the University of Toledo College of Law and Alexandra Sickler of the University of North Dakota School of Law, question whether the current state of affairs of the Fair Debt Collection Practices Act and the Supreme Court’s decision in Midland is in line with the balance of powers contemplated by the Code or feasible in light of the realities of bankruptcy practice. This Essay examines how creditor under-compliance and overreaching can impair access to justice in consumer bankruptcy cases. The authors consider generally the role that private litigation might play in addressing this problem. In Part II, the authors trace the arc of FDCPA litigation from its origins in the Eleventh Circuit in Crawford v. LVNV Funding, LLC to its end, with the Supreme Court’s decision in Midland Funding v. Johnson. They also outline how the bankruptcy system has struggled to address stale debt claims after Midland Funding. In Part III the authors conclude by considering the lessons of this short-lived legal theory on the utility of private litigation as a tool to achieve access to justice in consumer bankruptcy cases.
Professor Susan Block-Lieb, the Cooper Family Chair in Urban Legal Issues at Fordham Law, proposes that cities should be considered as an important source of consumer protection. Professor Block-Lieb examines various cities’ initiatives to provide debt advice to consumers, enhance consumers’ financial inclusion, and enable consumers to register complaints about financial services and possibly to mediate those disputes. It also explores some of the limitations of each of these strategies for consumer financial protection. The Essay next explains why cities can perform these sorts of consumer financial protection initiatives—that is, empowerment initiatives—better than other levels of government. This explanation is focused on cities’ concentrated proximity to consumers, their existing infrastructures, and their uniquely pragmatic methods of work. The author concludes by emphasizing the payoffs and limitations of emphasizing cities’ expertise in providing empowerment initiatives to resident consumers.
In this Article, Stefan Korch of the Max Plank Institute for Comparative and International Private Law, Hamburg, proposes using preliminary examiners as part of bankruptcy. The author argues that the Chapter 11 debtor-in-possession model causes major corporate governance problems due to management incentives that do not align with creditor interests. The bankruptcy court has, however, a strong instrument to detect and undo wrongdoing: the appointment of examiners. To overcome the expense and complication associated with traditional examiners, the author proposes the appointment of preliminary examiners. These examiners would conduct a summary investigation to detect potential violations of the law and report their findings to the bankruptcy court. On that basis, the court could make a more informed decision on the initial question of whether to appoint an ordinary examiner and, further, on the scope of her mandate. The main advantage compared to traditional examiners would be the substantially lower costs. This reform proposal would not only help to enrich the estate in the individual case but would also deter wrongdoing in the future. It hence can be understood as a tool to improve corporate governance in financially distressed or bankrupt companies.
Amir Shachmurove, an associate at Troutman Sanders LLP and four-time federal law clerk, discusses the interplay of the UCC, the CISG and the Bankruptcy code. The Article discusses the origins and application of both the UCC and the CISG as tools of national and international commerce respectively. It then discusses the particular challenges of using these codes in a bankruptcy setting and how application of one over another can yield a different result. The author settles on the notion that the CISG framework should be applied when determining the value, validity, and dischargeability of certain claims containing international contracts.
This Comment proposes a framework by which bankruptcy courts can analyze cases involving non-equity crowdfunding and small business debtors. The framework is best described in the context of four questions likely to be raised by the creditors of a crowdfunding debtor. Using these questions, a court evaluates these cases with an eye towards promoting trust in the crowdfunding sector. By explaining the proposed framework through the eyes of a fictional small business, this Comment argues that courts can answer creditors’ questions in a way that both satisfies the twin aims of bankruptcy and protects the integrity of the crowdfunding system.
Judicial recharacterization is a judge-made doctrine that allows a court to recharacterize a creditor’s claim as an equity investment. Courts use judicial recharacterization as a mechanism to reorder the priority of payments if the judge believes that the true nature of the transaction has the characteristics of an equity relationship from the outset, despite being classified as a loan. Recent debate has centered around the unwieldy and unpredictable nature of these recharacterizations. Creditors often face dramatic differences in the outcome of litigation depending on the jurisdiction in which their claim arises. Courts facing questions of judicial recharacterization have analyzed these aspects in dramatically different ways creating a split among the circuit courts on all three aspects. This Comment argues for the codification of the doctrine of judicial recharacterization.
Section 505 of the Bankruptcy Code allows a court of determine tax related issues. Apart from three narrow exceptions contained within the provision, bankruptcy courts’ authority under § 505 is essentially limitless. The broad language of § 505 extends bankruptcy courts’ authority far beyond the context of bankruptcy, and courts have acknowledged that the plain meaning of the statute effectively creates a second tax court system. Interpreting § 505 in this manner raises constitutionality and federalism concerns and is ostensibly impractical. For these reasons, courts have taken three general approaches to define the extent of bankruptcy courts’ authority under § 505. This Comment evaluates these three approaches and examines other limitations and mechanisms that courts have utilized to restrict bankruptcy courts’ authority to adjudicate § 505 proceedings. It concludes that the “arising under” approach is the ideal solution to § 505 because it emphasizes practicality while adhering to statutory canons and the goals of bankruptcy.
In corporate bankruptcies, regulations encourage the de-identification of consumer information and the restriction of sales to a limited pool of qualified purchasers operating in a similar industry. Judicial discretion is used to transfer privity from a debtor to a qualified purchaser. Both de-identification and the qualified purchaser requirement reduce consumer data values in bankruptcy and provide only a thin veil of protection. This Comment argues that courts should use their discretion to alter not only the privity among parties but also the terms of purchase in bankruptcy to maximize the value of consumer data claims.
Claims trading, the buying and selling of creditor claims, is a common part of modern bankruptcy. Most scholars denounce claims trading as a disruptor in the bankruptcy process. What the current research fails to recognize is that confining the analysis on claims trading to the single greatest-frequency period leads to incomplete theories. In reality, claims trading takes place outside of this period as well. When reexamined outside of the mainstream’s contexts (i.e., prior to the petition date or after plan confirmation), claims trading can offer significant benefits. Trading at these periods fosters healthier bargaining between the debtor and its creditors and enhances the likelihood of a swift procedure. Thus, bankruptcy constituents should contemplate and, moreover, endorse claims trading at either the pre-petition or post-plan confirmation phases to ease concerns about a trade’s disruptive capacity inside a bankruptcy case.

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