Bankruptcy (1993—1995)Postpetition Security Interests Under the Bankruptcy Code
David Gray Carlson, 48(2): 483–533 (Feb. 1993)
Section 364(c) and (d) of the Bankruptcy Code provides for the creation of security interests in real and personal property under federal law. This Article discusses the quality and nature of these federal security interests, their remarkable immunity from reversal on appeal, and the ability of postpetition lenders to obtain preferences over other creditors through "cross-collateralization" clauses and the like.
Entertainment Bankruptcies: The Copyright Act Meets the Bankruptcy Code
Schuyler M. Moore, 48(2): 567–609 (Feb. 1993)
This Article discusses the interplay of the Bankruptcy Code and the Copyright Act. The author discusses the nature of copyright laws in the United States and in foreign countries from the perspective of the licensee and the licensor and then explores the manner for obtaining and perfecting a security interest in copyrights. The author also explores the treatment of copyright licenses as "executory contracts " under the Bankruptcy Code and the manner for determining the ownership of licensed rights in a bankruptcy.
The Treatment of Assignments of Rents in Bankruptcy: Emerging Issues Relating to Perfection, Cash Collateral, and Plan Confirmation
Bonnie Kay Donahue and W. David Edwards, 48(2): 633–98 (Feb. 1993)
During the past several years, bankruptcy courts have struggled with determining the effect of an assignment of rents upon the bankruptcy of the assignor. The focus primarily has been upon whether the assignment has been sufficiently perfected so that the mortgagee's interest will be recognized in the bankruptcy case. As issues relating to perfection are resolved by case law and legislative efforts, new issues as to the treatment of rents during the course of the debtor's reorganization will arise. This Article reviews the present status of legislative and judicial pronouncements regarding perfection of an assignment of rents and explores new issues with respect to the treatment of a properly perfected security interest in rent in bankruptcy.
Chinese Walls for Creditors' committees
Robert C. Pozen and Judy K. Mencher, 48(2): 747–60 (Feb. 1993)
Institutional investors with large debt holdings should be encouraged to serve on creditors' committees in order to expedite the resolution of reorganization proceedings. Institutional investors are reluctant to serve on creditors' committees, however, because bankruptcy law may be interpreted as restricting them from trading in the debtor's securities. The authors explain how this problem can be resolved through the use of a Chinese Wall between the institutional investor's committee representatives and its traders.
Escrows and Bankruptcy
Thomas M. Byrne, 48(2): 761–77 (Feb. 1993)
In this Article, the author considers the impact of a bankruptcy filing by one of the parties to an escrow arrangement, reviews and critiques the published decisions on various aspects of the subject, and argues that confusion in the case law could be avoided by correctly identifying the interest of the debtor-party in the escrowed property.
Vultures Beware: Risks of Purchasing Claims Against a Chapter 11 Debtor
Richard Lieb, 48(3): 915–41 (May 1993)
There are potential risks to a purchaser of claims against a Chapter 11 debtor where the purchased claims were acquired at a deep discount and represent a blocking vote in a class under a proposed plan of reorganization opposed by the purchaser. The author explores whether the purchase of claims as a means of gaining control of a Chapter 11 debtor constitutes a lack of "good faith" within the meaning of Section 1126 of the Bankruptcy Code, resulting in the withholding of the right to vote the purchased claims.
The Other Key: Competition Between Shareholders and Creditors for the Tax Benefits of Bankruptcy
W. Bruce Johnson, 49(3): 1121–84 (May 1994)
The bankruptcy of a corporate subsidiary whose parent has traditionally filed a federal tax return which consolidates its subsidiary's tax attributes with its own may give rise to a conflict between the nonbankrupt parent and the subsidiary's minority shareholders and/or creditors concerning whether the bankrupt subsidiary's tax deductions, in particular its prepetition NOL carryforwards, should be included as property of its estate. Recent authority has determined that section 541 of the Bankruptcy Code makes a subsidiary's NOL carryforwards its property, irrespective of the facts and the parties' historical relations. The author challenges this authority and concludes that neither the Internal Revenue Code nor the Bankruptcy Code, but rather state law, the traditional source of property rights, is the appropriate source for analyzing putative property rights with respect to federal tax deductions.
Partnership Bankruptcy and Reorganization: Proposals for Reform
Morris W. Macey and Frank R. Kennedy, 50(3): 879–923 (May 1995)
This Article addresses partnership problems in reorganization in bankruptcy and solutions and proposed amendments to the Bankruptcy Code proposed by the Ad Hoc committee on Partnerships in Bankruptcy. The effect on a partnership of the filing of a Chapter 11 by or against a general partner in the partnership is among the issues considered. There are no provisions in Chapter 11 which deal with partnerships. The centerpiece of the proposals is the addition of Subchapter IV to Chapter 5 of the Bankruptcy Code, Cases of Partnerships and Partners, with new code sections which run from 561 to 570. Section 723 is to be repealed and sections 303 and 1111 amended. Five noteworthy partnership Chapter 11 cases are discussed, and the techniques and procedures by which these cases were handled are analyzed. The amendments largely codify the practice developed in the professional partnership cases discussed in this Article.