Corporate Reorganization and Bankruptcy
Course Information
- Course Number
- L6233
- Curriculum Level
- Upperclass
- Areas of Study
- Commercial Law and Transactions, Corporate Law, Business, and Finance
- Type
- Lecture
Section 001 Information
Section Description
Instructors for this course are Michael A. Gerber, Professor of Law at Brooklyn Law School, and Martin Glenn, United States Bankruptcy Judge for the Southern District of New York,
Limitations: Corporations is a prerequisite or corequisite. Although Basic Bankruptcy Debtor-Creditor Law is not a prerequisite, students are encouraged to take corporate finance courses while taking this course.
Method of Evaluation: Three-hour proctored open-book final examination.
In this course we shall examine (1) the legal and financial issues that result from operational distress and business solutions to effect restructuring and rehabilitation of business debtors and the interests of economic stakeholders, including creditors and other parties in interest; (2) the options that may be available to a distressed business entity to restructure and reorganize its business in conformity with the provisions for corporate and business reorganization under the United States Bankruptcy Code; (3) the requirements for statutory reorganization under the Bankruptcy Code, including the absolute priority rule, involuntary imposition of a reorganization upon creditors and stockholders (cramdown), disclosure, financing, equitable subordination, asset sales, and substantive consolidation of holding and operating companies; (4) the effect of the Bankruptcy Code provisions upon prebankruptcy financing transactions; (5) the fiduciary and ethical standards applicable to restructurings and reorganization; (6) the impact of secured financings and esoteric financings and securities on chapter 11 reorganization; (7) the role of debtors, professionals, creditors, officers, directors, other parties in interest, and credit and securities markets in the context of restructuring and reorganization situations pre- and during chapter 11 reorganization cases; and (8) the philosophy, principles, and policies underlying business reorganizations of distressed business entities.
- School Year & Semester
- Spring 2022
- Location
- JGH 105
- Schedule
-
Class meets on
- Monday
- Points
- 3
- Method of Evaluation
- Exam
- J.D Writing Credit?
- No
Learning Outcomes
- Primary
-
- The policies that undergird the rehabilitation process
- The business setting, transactions, conflicts, and challenges that are the backdrop of business reorganization cases
- The alternatives to Chapter 11 relief, including extrajudicial workouts, assignments for the benefit of creditors, and in- and out-of-court liquidations
- The characteristics of debtors that can (and should) be saved, and those that cannot and (should not) be saved – and how to distinguish one from the other and why it matters
- The nature, roles, and fiduciary duties of important Chapter 11 dramatis personae, including bankruptcy judges, U.S. Trustees, debtors in possession, operating trustees, examiners, creditors, creditors’ committees, equity holders, equity holders’ committees, indenture trustees, and their respective attorneys and other professional assistants.
- Ethical issues related to the representation of debtors, creditors, and others
- How the Chapter 11 process unfolds, from commencement, to committee formation, to rationalization of the debtor’s business plan, to negotiation of the debtor’s reorganization plan, to sale, rehabilitation, or orderly liquidation of the business, with myriad events in between.
- Why, in some cases, the classic Chapter 11 process is foreshortened by a quick sale of the business to new owners
- The operation and scope of the automatic stay in Chapter 11 cases, and related issues, including the treatment of mass tort, contingent, disputed, and so-called “future claims,” and related due process considerations.
- The critical role that valuation techniques play in determining the outcome of disputes that arise at various stages of business reorganization cases.
- The relationship of Chapter 11 to other chapters of the Bankruptcy Code, and to other bodies of law – including corporate, securities, property, contract, commercial, landlord/tenant, administrative, environmental, employee benefit, tax, and corporate finance law
- The standards for confirming a reorganization plan; the scope and effect of the Chapter 11 discharge and related due process issues; the consequences of a debtor’s failure to perform its plan obligations.
Course Limitations
- Instructor Pre-requisites
- Corporations (pre- or co-requisite)
- Instructor Co-Requisites
- Corporations (pre- or co-requisite)
- Recommended Courses
- Bankruptcy Corporate Finance
- Other Limitations
- None