The time-tested law that has developed under the United States Bankruptcy Code creates a sophisticated set of rules, structures, and procedures to preserve value in distressed businesses to protect stakeholders and maximize the return to creditors. Recent uses of legal mechanisms to take advantage of Chapter 11 and other provisions of the Code—including corporate restructuring and divisional mergers by companies facing liabilities from mass tort litigation—have drawn criticism in Congress and challenges in court.
Are these filings employing useful mechanisms to maximize the intended economic benefits of the Bankruptcy Code, or are they abuses of process? How do these bankruptcies affect litigants rights to recover? Are safeguards in the Bankruptcy Code and corporate law sufficient to control fraud, or are reforms necessary? Is there a problem with the Code that needs solving? What are the unintended consequences of tinkering with the Bankruptcy Code? These are questions facing Congress as it debates reforms to the Bankruptcy Code and for courts determining whether to allow bankruptcies to proceed under these circumstances.
The panel discussion will include an analysis of case law developments, including the February 25, 2022 opinion in In Re LTL Management, LLC denying a motion to dismiss one such bankruptcy filing. In that February 25 opinion, U.S. Bankruptcy Chief Judge Michael B. Kaplan explained that “this Court has little trouble finding that the chapter 11 filing serves to maximize the property available to satisfy creditors by employing the tools available under the Bankruptcy Code to ensure that all present and future tort claimants will share distributions through the court-administered claims assessment process. Movants’ challenge to the manner the estate is to be maximized does not alter the fact that a successful reorganization and implementation of a settlement trust will dramatically reduce costs and ensure balanced recoveries for present and future claimants.” Was the court correct? What does this mean for other challenges being brought to seek dismissal of similarly situated bankruptcy filers? And, how should these caselaw developments fit into the legislative debate?
Our experts will address these questions and concerns. The panel will include the following:
Anthony Casey, Deputy Dean and Donald M. Ephraim Professor of Law and Economics, The University of Chicago Law School
Alexandra Lahav, Ellen Ash Peters Professor of Law, University of Connecticut School of Law
Samir Parikh, Professor of Law, Lewis & Clark Law School
Lindsey Simon, Assistant Professor of Law, University of Georgia School of Law
Moderator: Donald J. Kochan, Professor of Law and Deputy Executive Director of the Law and Economics Center, Antonin Scalia Law School at George Mason University
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Contact Dominic Scavuzzo at firstname.lastname@example.org or 703.993.8388.