This paper ultimately seeks to promote a discussion that would have ideally been held before the safe harbors – defined as the provisions that allow market participants to ignore the core provisions of the Bankruptcy Code and other insolvency laws – were adopted by legislatures throughout...

In the Fall of 2008, Lehman Brothers had a $35 trillion derivatives portfolio, representing about 5% of the worldwide derivatives market. It was a party to approximately one million trades, under more than 6,000 ISDA master agreements.Lehman's derivatives were not the direct cause of its...

Sovereignty and sovereign immunity occur along a continuum. The kings and queens of old at one end; the North Hudson Sewerage Authority and its ilk at another. The need for a bankruptcy system to address financial distress varies inversely with a sovereign's place on the continuum. Queens and...

The absolute priority rule describes the basic order of payment in bankruptcy. Secured creditors get paid first, unsecured creditors get paid next, and only then do shareholders get paid, if at all. The rule has obtained a kind of unassailable, near scriptural status in the corporate...

Corporate debtors facing financial distress have a choice: file bankruptcy in their home jurisdiction or file in the United States. And some number of foreign corporations do file bankruptcy petitions in the United States.We expect this trend to increase in the coming years for two simple...

Among the collective wisdom about large corporate bankruptcy cases, the following points are almost undisputed: Longer chapter 11 cases cost more; Prepackaged chapter 11 cases cost less; Cases filed in New York or Delaware cost more; Fee examiners control the costs of big chapter 11 cases. But...

In this paper we focus on the concern that a preference for quick sales over traditional reorganization cases - which we see in both the United States and Canada - might allow the debtor's management to work with secured lenders to extract assets from the debtor in a way that would not be...

Understanding the costs of corporate bankruptcy has importance in a variety of contexts. Most obviously, if the costs of corporate bankruptcy are “excessive” – a term that is surprisingly difficult to define – it has clear policy implications for legislators with regard to the Bankruptcy...

It has been observed that large chapter 11 cases have become increasingly “professionalized.” In particular, while once debtor's counsel might have handled the bulk of the reorganization, the debtor now routinely retains specialized professionals to address specific aspects of the case....