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This thesis focuses on the resolution of financial distress and bankruptcy and comprises of three chapters in this area. The underlying theme across these chapters is to understand and quantify the direct and indirect costs of distress, as well as innovations in bankruptcy resolution that might improve the overall efficiency of asset allocation in the economy. The first chapter investigates the role of rights offerings as a new market-based mechanism in resolving valuation uncertainties in U.S. Chapter 11 reorganizations. Using hand-collected data on these offerings, I document three novel facts: (i) in the last decade, they have been used to finance 45% of bankruptcy filings, (ii) hedge funds or private equity firms generally proposed them, and (iii) their occurrence is highly correlated with the performance of the stock market. In an instrumental variable setting, I find that compared with other sources of financing, rights offerings are associated with higher recovery rates, shorter time spent in Chapter 11, and lower bankruptcy refiling rates. They also allow firms to access new capital without resorting to asset liquidations, which are value reducing. Overall, these findings suggest that by alleviating key bargaining frictions in the bankruptcy process, rights offerings may improve the efficiency of resource allocation in the economy. The second chapter decomposes the raw fire sale discount into a quality component, a misallocation component, and a residual liquidity component. We find that distressed airlines undermaintain their fleets and, this quality impairment explains half of the discount. We find no evidence of misallocation to lower productivity users. While the raw discounts are much larger for Chapter 7 than Chapter 11 transactions, the difference is largely explained by longer periods of under-maintenance and consequently lower quality of aircraft sold in Chapter 7. The evidence suggests that the magnitude of welfare losses associated with fire sales are likely to be overstated. The third chapter explores whether sophisticated bankruptcy procedures are required to mitigate coordination failures and fire sale discounts arising from financial distress. The shipping industry provides a unique laboratory for examining the limits of Coase for resolving financial distress since the industry is largely detached from sovereign bankruptcy procedures. We find that 2 private contracts and institutions have evolved to resolve coordination failures: for example, we find a low incidence of vessel seizures, ports that compete to enforce creditor rights, and small fire sale discounts. However, we report significant spillovers of financial distress for other stakeholders, particularly environmental, who bear the costs of under-maintained vessels, including oil spills, and abandonment of derelict ships, which end up in toxic breaker yards.

This thesis presents a detailed analysis of the Chancery practice in relation to both bankruptcy and insolvency between 1543 and 1628. The aim of the thesis is to improve our understanding of the foundations and early development of bankruptcy and insolvency law in England. The methodology of the thesis is primarily doctrinal, but it uses historical methods to trace and understand unexplored cases and other legal archival materials in Chancery records, and together with additional historical and literary sources puts the law into a social and economic historical framework. The thesis shows that the Court of Chancery had two functions in relation to bankruptcy and insolvency. The survey of the records shows that the Court of Chancery exercised a review function in relation to the decisions of the commissions of bankrupts which were authorised to deal with bankruptcy matters in the first instance, including declaring debtors bankrupt. This meant that the Court of Chancery effectively worked as an appellate court for the decisions of commissions of bankrupts. In addition to the review function, the Court of Chancery also had an equitable function in relation to insolvency matters. In its equitable function the Court of Chancery dealt with issues concerning insolvent debtors that were not regulated by statutory bankruptcy or the common law. This thesis breaks with conventional scholarship and shows that the Chancery practice in this area appears to have been very humane, with special care for the most vulnerable in society, and that 'modern' bankruptcy principles and ideas, such as the concept of insolvency by misfortune, voluntary bankruptcy, debt settlements (compositions), majority control and the discharge of debts, which have generally been attributed to the bankruptcy statutes of 1705 and 1711, were already applied in the Court of Chancery in this earlier period.

The subject of this thesis is the operation of corporate insolvency law in post-colonial India. Indian corporate insolvency law has been widely condemned as dysfunctional, critics complaining of extreme delays and a series of associated harms to creditors in the disposal of formal proceedings. Surprisingly little is known, however, about why the law has ‘failed’ creditors in this way - why the law operates as it does. That is the question that motivates this thesis. The thesis reports the results of an in-depth study of the introduction and development of India’s two principal insolvency procedures for corporate debtors: liquidation (under the Companies Act 1956) and rescue (under the Sick Industrial Companies (Special Provisions) Act 1985, for industrial companies). The most significant contribution made by the thesis is the reporting of new evidence of the influence of judges on the development of these two insolvency procedures over time, drawn from an original analysis of a large body of Indian case law. This evidence suggests that the role of the courts (or more specifically, the role of judges) has been significantly underestimated in previous attempts to explain the demise of corporate insolvency law in post-colonial India.

Bankruptcy is being used as a tool for silencing survivors and their families. When faced with claims from multiple plaintiffs related to the same wrongful conduct that can financially or operationally crush the defendant over the long term—a phenomenon we identify as onslaught litigation—defendants harness bankruptcy’s reorganization process to draw together those who allege harm and pressure them into a swift, universal settlement. In doing so, they use the bankruptcy system to deprive survivors of their voice and the public of the truth. This Article identifies this phenomenon and argues that it is time to rein in this destructive use of bankruptcy. Whereas the current literature largely discusses mass tort bankruptcy from a doctrinal, constitutional, or economic perspective, this Article examines how bankruptcy proceedings like these cause direct harms to survivors, to public trust in the justice system, and to the corporate economy. It traces the evolution of defendants’ use of bankruptcy to resolve mass torts from asbestos, IUD, and breast implant product liability litigation to its present-day use in controversies involving the Catholic Church, Purdue Pharma, the Weinstein Companies, USA Gymnastics, the Boy Scouts of America, Alex Jones’s Infowars, and Johnson & Johnson. The Article shows how the prior use of reorganization for mass torts created the necessary conditions to allow defendants to use bankruptcy to silence people and facilitate cover-ups in a wider variety of onslaught litigation. It concludes with a normative proposal for the narrow circumstances in which courts should allow bankruptcy to be used to deal with onslaught litigation, while still preserving the voices of those harmed.

Most people believe that debtors' prisons are a relic from English history; however, a new form of debtors' prisons exists for Americans. In his novels, Charles Dickens described the conditions and struggles inmates faced in pre-twentieth century England because they could not pay their debts. The prisons, often operated by private individuals on behalf of the government, charged inmates for services provided, which trapped inmates for long periods as their debts continued to grow during their incarceration. Although legislation in both America and England would end formal debtors' prisons in the nineteenth century, a new form of debtors' prisons has emerged in the United States. These modern-day debtors' prisons exist for defendants who are unable to pay ever-increasing criminal justice debt. Just as the debtors in traditional debtors' prisons faced ever-increasing fees, defendants in the criminal justice system face fees at every stage of the criminal justice process, including pre-trial, sentencing, incarceration, and supervision. These include fees for services from private companies that have contracted with the government and charge substantially above-market rates. Often the fees assessed are more than the fines associated with the underlying criminal offenses. Moreover, individuals unable to pay initial fees and fines may face “poverty penalties” in the form of interest, late fees, and collection charges, putting them in a never-ending cycle of debt. This chapter compares the traditional debtors' prisons to modern-day debtors' practices and evaluates reforms to combat the resurgence of debtors' prisons.

What does education mean to individuals in the world today? Education is a way one can attain or improve his or her ability to lead and survive in the society of ours. Without educational training of the mind, it may be impossible to realize the importance of adaptability of living in the environment. Without education, It may also be difficult to embellish the use of both the mental and physical attributes possessed by individual beings. What really is education? Education is the training of the mind to perform desire functions or to perpetuate the modality of obtaining an end or result. Every daily activities of individual in the society are a form of education because one learns from his actions one way or the others. The impropriety sanctions imposed by the society on education is to be viewed by educational establishments as the main reasons affecting lack of interest in adult education. It is perceived by the society at large that once one has attained success or obtained all the necessary rudiments of living, then it is less important to further educate the mind. The sanctions or believes that education is only for the incapable or non-successful individual is an incarnation or insults to education, especially adult education. Society should view education as a way to improve knowledge. We should realize that knowledge comes from learning and learning comes from trying. Even though one has reached the highest peak of his life or career does not mean that one does not have to learn or educate the mind. Since education is perceived by the philosophers such as Plato, Socrates and Darwin to be the usage of the mind to obtain reality to solve problems, all institutions must be equipped with all the technologies to improve education at all levels. We should all view education as the path to knowledge, empowerment, prosperity and success. Leaders evolved through education – leaders are made through education. For example, without education, either formal or informal, we may not be able to read, hold a good conversation or write well. Education is a vital commodity to the well being of individual in the society of ours. Education is one's umbrella of wealth, health, empowerment and success so to speak. We should view as an incarnation of empowerment and path to success in our world.

“Safe assets” is a catch-all term to describe financial contracts that market participants treat as if they were risk-free. These may include government debt, bank deposits, and asset-backed securities, among others. The International Monetary Fund estimated potential safe assets at more than $114 trillion worldwide in 2011, more than seven times the U.S. economic output that year. To treat any contract as if it were risk-free seems delusional after apparently super-safe public and private debt markets collapsed overnight. Nonetheless, safe asset supply and demand have been invoked to explain shadow banking, financial crises, and prolonged economic stagnation. The economic literature speaks of safe assets in terms of poorly understood natural forces or essential particles newly discovered in a super-collider. Law is virtually absent in this account. Our Article makes four contributions that help to establish law’s place in the safe asset debate and connect the debate to post-crisis law scholarship. First, we describe the legal architecture of safe assets. Existing theories do not explain where safe assets get their safety. Understanding this is an essential first step to designing a regulatory response to the risks they entail. Second, we offer a unified analytical framework that links the safe asset debate with post-crisis legal critiques of money, banking, structured finance and bankruptcy. Third, we highlight sources of instability and distortion in the legal architecture, and the political commitments embedded in it. Fourth, we offer preliminary prescriptions to correct some of these failings. Precisely because there are no risk-free contracts, state intervention supplies the essential infrastructure to let people act as if some contracts were risk-free. The law constructs and maintains safe asset fictions, and it places them at the foundation of institutions and markets. This project is unavoidably distributive and fraught with distortions.

Today, there can be little doubt that “alternative” dispute resolution is anything but alternative. Nonetheless, many judges, lawyers (and law students) do not truly understand the dispute resolution processes that are available and how they should be used. In the shadow of the current economic crisis, this lack of knowledge is likely to have negative consequences, particularly in those areas of practice such as bankruptcy and foreclosure in which clients, lawyers, regulators, and courts work under pressure, often with inadequate time and financial resources to permit careful analysis of procedural options. Potential negative effects can include: (1) impairment of a lawyer’s ability to provide her clients with competent advice regarding the appropriate application of these procedures; (2) impairment of a lawyer’s ability to suggest new dispute resolution hybrids that are both creative and implementable; (3) inappropriate use of dispute resolution procedures, adversely affecting clients, third party beneficiaries/victims, sponsoring institutions, and the integrity of dispute resolution as a field; (4) inadequate regulation, monitoring, and use of dispute resolution procedures; (5) the temptation of some lawyers, clients, and institutions to make intentionally inappropriate and even unethical use of dispute resolution procedures; and (6) new, and sometimes entirely unnecessary, satellite litigation arising out of the use of dispute resolution procedures. Meanwhile, the current ethics rules for lawyers, which are based largely on the American Bar Association’s Model Rules of Professional Conduct and are supposed to provide some sort of an ethical and professional brake upon “sharp practices” by lawyers, are either so ambiguous or so insufficient in their treatment of “non-adjudicative” dispute resolution procedures that they may invite bad behavior by clever clients or their lawyers. This Article tells two tales – one hypothetical, the other the real story that inspired the hypothetical – that illustrate many of the negative effects described supra. While now is the time to advocate for the increased use of dispute resolution procedures in bankruptcy and foreclosure matters, now is also the time to demand more stringent education and regulation of lawyers to assist them in making sufficiently knowledgeable, skillful and ethical use of “alternative” dispute resolution procedures, especially in the court-connected context. Law schools, meanwhile, play an essential role in educating students regarding existing dispute resolution procedures and their application, but law schools are much more likely to incorporate such material into their curricula if bar exams test for future lawyers’ knowledge and thoughtful application of these procedures. Last, the Model Rules of Professional Conduct and states’ ethics rules for lawyers should be updated to respond to the many ethical ambiguities that currently haunt non-adjudicative court-connected dispute resolution.

Due to our current deep economic woes, growing bankruptcy filings, and apparent legislative unwillingness to expand the number of judges, bankruptcy courts are exploring the use of mediation to help resolve adversary proceedings, negotiate elements of reorganizations, and deal with claims that cannot be heard directly in bankruptcy proceedings. In addition, mediation advocates have been consistent in urging greater use of the process to reduce debtors’ and claimants’ costs, bridge the jurisdictional and standing challenges that bankruptcies can pose, and offer claimants the opportunity to be heard and determine their own resolution of claims. At this point, the relatively few judicial opinions currently available that discuss bankruptcy mediation demonstrate that bankruptcy courts generally favor the use of mediation to resolve claims and help with reorganizations. The cases also reveal, however, that some parties are attempting to use mediation to achieve unexpected and potentially inappropriate results and that bankruptcy judges, parties and/or their lawyers apparently expect mediators to do much more than facilitate the parties’ communication, negotiation and resolution. Sometimes, for example, judicial opinions reveal an assumption that mediators will make decisions – both procedural and substantive – and that in reviewing these decisions, judges should grant substantial deference to the mediators. Cases such as these suggest that the repeat players within bankruptcy do not understand how the role of the mediator is supposed to diverge in significant ways from the “traditional neutral” roles of trustee, special master, magistrate, arbitrator, examiner or judge. Though an appropriate response would appear to be education of the repeat players involved in bankruptcies, these cases also may signal that mediation will not always be the most appropriate vehicle for resolving issues within, or related to, bankruptcy. Instead, it may be that bankruptcy courts should both incorporate mediation in appropriate cases and consider expanding the availability or functions of “traditional neutrals”. In the bankruptcy context, that might mean experimenting with the use of trustees and examiners in innovative procedures that include, as one part of the procedures, facilitation of dialogue and consensual resolution. Importantly, bankruptcy courts would need to ensure that both trustees and examiners receive training in facilitation skills and procedures that will help them manage this new function appropriately and achieve both procedural and substantive justice. Though divorce and child custody matters may seem far-removed from bankruptcy proceedings, liquidations and reorganizations bear some intriguing superficial similarities to divorces and ongoing custody and support arrangements (perhaps better termed “familial reorganizations” for purposes of this Article). In addition, an examination of the use, abuse and evolution of mediation in this area of practice may prove useful for those who are now introducing mediation into bankruptcy. For example, some commentators have recently begun advocating for a more limited use of divorce and child custody mediation, in part due to the emergence of new, hybrid dispute resolution models that confound any bright line distinction between consensual and adjudicative approaches. This Article begins to suggest options that would permit bankruptcy courts, repeat players within the system and their clients to skip a couple of the stages that were involved in the evolution of divorce and child custody mediation, provided there is willingness to consider the lessons of others’ history (or as this Article’s title suggests, “her/history”).

In theory, the substantive rights of secured creditors such as mortgagees are affected much less by bankruptcy proceedings than those of unsecured creditors. In practice, however, bankruptcy proceedings have affected mortgagees. Filing a bankruptcy petition automatically stays pending foreclosures. Trustees in bankruptcy also can set aside foreclosures of certain liens obtained by unsecured creditors and certain mortgages and deeds of trust executed in the year preceding bankruptcy. The decision in Durrett adds yet another weapon to the bankruptcy trustee's arsenal: the power to void nonjudicial foreclosure sales even though the sale is proper and final under state law.