In this Essay on Lynn LoPucki and Bill Whitford?s corporate reorganization project, written for a symposium honoring Bill Whitford, I begin by very briefly describing its historical antecedents.
The project draws on the insights and perspectives of two closely intertwined traditions: the legal realism of 1930s, whose exemplars included William Douglas and other participants in the SEC study; and the law in action movement at the University of Wisconsin. In Section II, I briefly survey the key contributions of the corporate governance project, which punctured the then-conventional wisdom about the treatment of shareholders in bankruptcy, managers? principal allegiance, and many other issues. In Section III, I consider two major shifts that have taken place in Chapter 11 practice in the twenty-five
years since the study: the rise of creditor influence in Chapter 11, and shifts in the principal participants in (and scope of) large corporate reorganization cases. In Part IV, I explore one of LoPucki and Whitford?s key proposals ? compensation for unsecured creditors when they are made to bear business risk in bankruptcy ? and consider its potential relevance for the hotly debated, current question of the scope of a secured creditor?s lien in bankruptcy.
This paper looks at the phenomenon of “defensive regulatory competition” in European corporate law following Centros, Überseering and Inspire Art. In order to retain control over the corporate governing private limited entities operating within...Read more
We study how the human capital embedded in teams is reallocated in corporate bankruptcies using data on US inventors. We find that bankruptcies reduce team stability. After a bankruptcy, team-dependent inventors produce fewer and less impactful...Read more
In this essay, I discuss the rise and fall of regulatory competition in corporate insolvency law in the European Union. The rise is closely associated with the European Insolvency Regulation (EIR, 2002), and it is well-documented. The UK has...Read more
Stock markets price listed firms, while defaulted firms delist. Due to the lower profits of defaulted firms, the average stock price exceeds firm unconditional expected value. Such price-value wedge originates from a survivorship bias. The wedge...Read more