It is widely agreed that capital cost reduction should be among the goals that a business bankruptcy law should pursue. This Essay argues that capital cost reduction should be the only goal, and that a bankruptcy system seriously committed to this goal would be both smaller and less centralized...

The fees of experts (financial advisors, lawyers, accountants) are a substantial fraction of bankruptcy costs. Scholars have considered how best to reduce these costs, but have not considered how they should be allocated among creditors. The allocation issue is important because creditors can...

The regulatory compliance defense holds firms liable whose products or product warnings fail to satisfy federal regulatory standards, but does not exculpate firms that comply. Rather, compliance is relevant evidence for a jury to consider in a products liability action. This article argues that...

Creditors and the insolvent firm are required to use the state supplied bankruptcy procedure if they cannot agree on a private resolution after financial distress has occurred. While these ex post workouts are legal, parties cannot agree in the lending contracts to use a bankruptcy procedure...

This essay reviews the normative implications of contractual incompleteness. It reaches two conclusions: First the state can complete contracts with efficient defaults in fewer cases than is commonly supposed. Second, making specific performance routinely available for contracts that are...

Parties to lending agreements can create priority rankings in two ways: by securing a lender or by protecting the lender's debt with financial covenants. Protected debt turns into high priority debt because the early lender will permit covenant violations only if a later lender agrees to...

We consider legal rules that determine the price at which minority shareholders can be excluded from the corporate enterprise after a change in control. These rules affect investment after such a change as well as the probability of the change itself. Our principal results are that minority...

Private law theory must confront the plurality of values that inform the problems that private law addresses in practice. We consider Hanoch Dagan's and Michael Heller's The Choice Theory of Contracts as a case-study in the promise and perils that embracing plural values poses for private law...

A bankruptcy system is believed necessary to solve a coordination problem among the creditors of a distressed firm. The firm should survive if its going concern value exceeds its liquidation value, but each creditor, who is assumed to hold debt that is small in relation to the total, has too...