z Bankruptcy Litigation Blog : Bankruptcy in the Blogs

Please "Follow Me on Twitter"

Listening to Kevin O'Keefe at the Emory Symposium describe twittering as perhaps the most important branding tool since the advent of television (an obvious exaggeration, but point taken), I decided to finally start Twittering as a complement to blogging.  I started this blog in 2005 as an alternative to pointless, incessant barking, and I've tried to maintain it as a resource of substance, not triviality.  Still, it's clear there's a definite place for barking in bankruptcy, and that's where Twitter, with its 140 character limit, fits in.  So, last Thursday, I started twittering.  Here are my latest two posts:

The past 4 years of blogging have generated over 500,000 page views.  Today I have just 21 followers on Twitter, but you've got to start somewhere.  Those interested in hearing me bark on bankruptcy should click here and "Follow Me on Twitter."  Here's the RSS Feed link to my Twitter posts.

Thanks for reading and following!

© Steve Jakubowski 2010

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LoPucki v. Baird Redux: Bankruptcy Titans Blog "Head to Head" Over Chapter 11's Utility or Futility

It's always gratifying to learn that bankruptcy legends read this blog.  Lynn LoPucki is one of those people. 

Last night I opened an email I received from Professor LoPucki letting me know that he and my (not-so-old) old law school professor, Doug Baird, would be duking it out at the University of Chicago Faculty Law Blog over issues raised in Professor LoPucki's recent paper (written with empiricist Joseph W. Doherty) entitled Bankruptcy Fire Sales, 106 Mich. L.R. 1 (2007).  The article was posted on SSRN last April, accompanied by the following abstract:

For more than two decades, scholars working from an economic perspective have criticized the bankruptcy reorganization process and sought to replace it with market mechanisms. In 2002, Professors Douglas G. Baird and Robert K. Rasmussen asserted in The End of Bankruptcy (pdf), an article published in the Stanford Law Review, that improvements in the market for large, public companies had rendered reorganization obsolete.  Going concern value could be captured through sale.
This article reports the results of an empirical study comparing the recoveries in bankruptcy sales of large public companies in the period 2000-2004 with the recoveries in bankruptcy reorganizations during the same period.  We find that, controlling for company values reported at case commencement, pre-filing operating profits, and post-filing operating profits, the recoveries in reorganization cases are more than double the recoveries from going concern sales.  We attribute the low recoveries in sale cases to continuing market illiquidity and the corruption of the bankruptcy process by competition among bankruptcy courts for large, public company cases.
We also find that bankruptcy recoveries are higher in years when merger and acquisition activity is higher for reasons other than high stock prices.  Lastly, we find that bankruptcy recoveries are higher when debt capacity in the debtor's industry is lower – the opposite effect predicted by Professors Andrei Shleifer & Robert W. Vishny in their landmark article in 1992 [entitled Liquidation Values and Debt Capacity: A Market Equilibrium Approach, 47 J. Fin. 1343 (1992)].

This "H2H"--as the U of C Law Blog calls the "head to head" grudge match--is sure to be a classic, as Professors LoPucki and Baird have been sparring over bankruptcy's most fundamental questions since 1990, when Professor LoPucki first challenged Professor Baird's "faith" in the free market's ability to properly value a company's worth in chapter 11.  See LoPucki, Bargaining Over Equity's Share in the Bankruptcy Reorganization of Large, Publicly Held Companies, 139 U. Penn. L. Rev. 125 (1990).  Their ongoing debate remains central to bankruptcy jurisprudence, as noted in this last post, with recent opinions by the Seventh Circuit's Judge Cudahy (while sitting by designation as a Third Circuit judge in VFB LLC v. Campbell Soup Co.) and Judge James M. Peck (in the Iridium bankruptcy) suggesting that judges, by placing a heavy burden of proving market folly on the party challenging the market's indication of value, are beginning to share Professor Baird's faith in free market valuations.

Professor LoPucki also took issue early on with the idea that chapter 11 should be eliminated and companies forced instead to liquidate expeditiously in chapter 7, an idea he attributes first to a 1986 article by Professor Baird (and Professor Baird's former writing partner, Thomas H. Jackson).  See LoPucki, Strange Visions in a Strange World:  A Reply to Professor Bradley and Rosenzweig, 91 Mich L. Rev. 79 n.2 (1992); and LoPucki & Whitford, Corporate Governance in the Bankruptcy Reorganization of Large, Publicly Held Companies, 141 Univ. Pa. L. Rev. 669 (1993).

Professor LoPucki stepped up the rhetoric in the debate in 1994, paying Professor Baird this back-handed compliment at an interdisciplinary conference at Wash. U. Law School:  "Without the unrealistic work done by Baird and Jackson during the 1980s, bankruptcy scholarship might not have gone beyond the relatively shallow analysis produced by doctrinalism in the 1970s."  See LoPucki, Reorganization Realities, Methodological Realities, and the Paradigm Dominance Game, 72 Wash. U. L. Q. 1307, 1312 (1994).

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Judge Gropper's Northwest Airlines Rulings Send Hedge Funds Back to the Drawing Board to Devise Alternative Litigation Strategies

Be sure to read Bob Eisenbach's excellent up-to-the-minute summaries (here and here) on his In the (Red) Business Bankruptcy Blog of Judge Gropper's rulings in the Northwest Airlines bankruptcy case (recently filed plan and disclosure statement are here). 

As reported by Bob, Judge Gropper in this first opinion dated 2-26-07 required hedge funds that were members of an ad hoc committee of equity holders to disclose the most holy of grails (i.e., the specific amounts held and how much was paid for each member's interests in the debtors), and in this second opinion dated 3-9-07 refused to let them submit this information under seal.

Bob has done a great public service by pulling together the disparate pieces of this rapidly developing story.  Thanks, Bob!

 

© Steve Jakubowski 2007

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Welcoming -- and Congratulating -- More Colonizers of the Blogosphere

While debate rages as to whether legal blogging will ever "cross the chasm," new entrants continue to populate the bankruptcy and litigation blogosphere.  First and foremost, however, before welcoming new entrants to the blogosphere, I must pay tribute to one of the pioneers of the blogosphere, Bill Patry of the Patry Copyright Blog (whose blog has been in my blogroll since inception).  Bill has just completed one of the most remarkable single achievements by a lawyer in our time; that being a 17 volume, 6,000 page masterpiece on Copyright Law aptly called Patry on CopyrightRemarkably, the project was seven years in the making and every word was written by Bill!  Congratulations, Bill!  You're an inspiration for us all!

Congratulations are also in order for Delaware's "Lou Gehrig" of blogging, Fox Rothchild's own Francis Pileggi, of the Delaware Corporate and Commercial Litigation Blog, who in his nearly two years of blogging hasn't missed reporting on every corporate law case of import from Delaware's federal and state courts, including on these important bankruptcy-related topics:  a bankruptcy trustee's standing (here and here); duties of an insolvent company's directors (here, here, and here); deepening insolvency (here, here, here, herehere, and here); D&O indemnity claims (here); arbitration and the automatic stay (here, here, and here); the two dismissal rule (here); legal fees (here); fraudulent transfers (here and here); restrictive covenants in shopping center leases (here); choice of law (here); receivership (herehere, and here); bankruptcy's effect on Del. appraisal rights (here); sanctions for document destruction in a bankruptcy case (here); and the interface generally between bankruptcy law and corporate law (here).

Now to the newbies I've recently added to the blogroll:

Greg Joseph, a great trial lawyer and friend of several who inhabit my firm's halls, started up the Complex Litigation Blog, focusing on matters pertinent to complex litigation, U.S. and international arbitration, the Federal Rules, and state rules.  The blog provides a daily dose of wisdom from one with a sharp eye for what trial lawyers care about.

Lee Barrett, a bankruptcy litigation lawyer with Forshey & Prostok in Fort Worth just started the E-Everything For Bankruptcy Lawyers Blog, focusing on the impact of the electronic revolution on bankruptcy practice and bankruptcy lawyers' everyday life.  Here's a piece Lee wrote for the State Bar of Texas Bankruptcy Law Section Newsletter entitled E-Discovery and the Commercial Bankruptcy Practitioner:  Forget Swimming with the Sharks, Beware of the Nitro Fish!

Those interested in scientific and technical evidentiary issues should subscribe to the Scientic Evidence Blog, published by Cliff Hutchinson of Dallas' Hughes & Luce.

Chicagoan Mazyar Hedayat moved and renamed his DuPage County Bankruptcy Blog, and continues his up-to-the-minute summaries of significant cases at the Bankruptcy Blog.

Binnacle, LLC, a San Antonio-based consulting group developed a user-friendly site, trollerBk, as a great alternative to the clunky PACER system.  Instead of searching district by district and case by case in PACER for cases, motions, briefs, or orders, TrollerBk provides a one-stop shop for searching and retrieving key documents and information for the 62,118 bankruptcy cases in its database.  It also provides daily RSS feeds of significant corporate bankruptcy filings of the preceding day.  Basic services are provided for free.  Premium services command monthly fees that are surely worth the price if you're a heavy PACER user. 

1/26/07 UpdateMy former law school classmate, and resident class genius, Randy Picker, now a full tenured professor at the law school, started up two new blogs this semester: the Antitrust & IP Policy Seminar Blog and the Network Industries Blog.   Here's a link to Randy's description of the genesis of the blogs, and of the courses he teaches at the law school (the syllabus and course material links alone make the post worth reviewing).  Randy's first "test" blog back in June 2005 (the "Picker MobBlog"), with its real-time chronicling of the import and subtle nuances of the US Supreme Court's opinions in Grokster and Brand X, was what turned me on to serious legal blogging, and hooked me from the start.  Best wishes for continued success, Randy!  Thanks for sharing your thinking and materials with us!

© Steve Jakubowski 2007

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New Colonizers of the Bankruptcy Blogosphere

About a year ago, I was moved to start this blog primarily because of the surprising dearth of blogs that addressed bankruptcy-related issues.  Well, colonization of the bankruptcy blogosphere has increased significantly since.  Here are a few recent entrants that surely deserve your attention:

Credit Slips:  A Discussion on Credit and Bankruptcy:  This blog brings together seven strong academics, including Harvard's Elizabeth Warren and Univ. of Illinois's Bob Lawless, to discuss and debate "what does happen and what should happen when consumers and businesses borrow money."  Of course, anyone toiling in BAPCPA's consumer trenches knows well that there's a big disconnect between "what does happen" and "what should happen," so expect many quality posts from this cerebral bunch.

In the (Red):  The Business Bankruptcy BlogThis blog aims at helping non-bankruptcy professionals "stay informed about important business bankruptcy issues and developments."  I suspect that posts from the blog's founder, Bob Eisenbach of Cooley Godward LLP, also will provide bankruptcy professionals with lots of good material to ponder.

The Georgia Bankruptcy Law BlogAtlanta's Scott Riddle is equally obsessive in maintaining a current working knowledge of bankruptcy law, and invariably posts about new and interesting cases you're likely not to have heard about yet.

The latter two blogs, along with this blog and a host of others, are affectionately maintained by LexBlog, founded by Kevin O'Keefe, whose foresight, dedication, and good business sense have significantly contributed to the advancement of quality legal blogs.  Thanks again, Kevin.

Good luck to all!

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Professor Spencer Blogs Bankruptcy on His "Federal Civil Practice" and "Split Circuits" Blogs

Bankruptcy matters have been the focus of several recent posts by A. Benjamin Spencer, a rising star who is currently Assistant Professor of Law at the University of Richmond School of Law and the brains behind two terrific blogs that have recently caught my attention.

His first blog, started last September, is the Federal Practice Bulletin blog, which I highly recommend to all bankruptcy litigators. His latest post is entitled "Fourth Circuit Holds that Class Action Not Superior Method Under Rule 23(b)(3) Compared to Adversarial Bankruptcy Proceeding." In it, he cites to a recent decision, Gregory v. Finova Capital Corp., 2006 WL 619063 (4th Cir., 3/14/06) (pdf), where the Fourth Circuit issued another fractured opinion, this time reversing as an abuse of discretion a decision of the South Carolina district court certifying a securities fraud class action case commenced by the debtor's noteholders against the debtor's principal lender on the basis that the Creditors' Committee had already commenced an adversary proceeding against the lenders containing similar securities fraud allegations.

Given the split within the 4th Circuit itself, Professor Spencer must have had a tough time deciding whether to include the Gregory case on his Federal Practice Bulletin blog or his second blog, started last October, called "Split Circuits" (though "split circuits" generally relate to splits among the circuits, not splits within a single circuit itself). Bankruptcy practitioners have long known that if you look hard enough, you'll find a bankruptcy court opinion to support just about any litigation position asserted, so don't be surprised then to see Professor Spencer blogging about bankruptcy quite frequently in his Split Circuits blog, as he did in these two recent posts:

Petition for Cert. Filed to Settle Circuit Split re application of 28 U.S.C. § 1367 to Bankruptcy Jurisdiction; and
Fourth Circuit Notes Circuit Split re Whether Bankruptcy Law "Property of the Estate" Includes Property the Debtor Fraudulently Transferred.

Best of luck Professor Spencer and thanks for your contributions to the blogosphere!


UPDATE: Special thanks to Craig Goldblatt of WilmerHale's DC Office for sending along pdf's of the cert. petition and the corresponding appendix in the Sasson v. Sokoloff case regarding the applicability of 28 USC § 1367 and principles of "pendant," "ancillary," and "supplemental" jurisdiction in bankruptcy cases. With bankruptcy-related procedural issues among Justice Ruth Bader Ginsburg's favorite topics, we sure hope that the Supreme Court grants the cert. petition. It certainly is an issue that daily affects the decisions of bankruptcy judges and litigators.

© Steve Jakubowski 2006

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Weekly Blog Roundup on Bankruptcy-Related Topics for the Week Ended 12/2/05

Below are some notable blog posts for the week ended 12/2/05 on the following topical bankruptcy issues of interest to the bankruptcy litigator and practitioner:

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Calpine's Distress

Delphi's Bankruptcy

Hedge Funds under Scrutiny

More Professional Feasting in Bankruptcy

Substantive Consolidation

The Workout Business Today

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Weekly Blog Roundup on Bankruptcy-Related Topics for the Week Ended 11/25/05

Below are notable blog posts on the following topical bankruptcy issues of interest to the bankruptcy litigator and practitioner for the week ending 11/25/05.

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Judge Alito's Bankruptcy Jurisprudence

The Portland Archdiocese Disclosure Statement Filing

The Problem of Legal Valuation Uncertainty

Asbestos Trust Fund Talk

The UK Housing Bubble and Its Lessons

Management-Labor Disputes Spilling Into Bankruptcy Courts

Professional Feasting in Bankruptcy

Derivative Risks

Entergy's Failure, Katrina, and a Dark New Orleans

Delphi and GM's Woes, from a Union Perspective (with lots of good news stories from the Detroit Free Press, Automotive News, and other great newspapers)

Delta Bankruptcy Judge Beatty's "Live-Wire" Comments

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Weekly Blog Roundup on Bankruptcy-Related Topics for the Week Ended 11/18/05 - Part 2

Below is our second installment of notable blog posts on topical bankruptcy issues of interest to the bankruptcy litigator and practitioner for the week ending 11/18/05. Enjoy the weekend!

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Weekly Blog and News Roundup on Bankruptcy-Related Topics for the Week Ended 11/18/05 - Part 1

Below is our first installment of notable blog and news posts on topical bankruptcy issues of interest to the bankruptcy litigator and practitioner for the week ending 11/18/05. Enjoy!


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Weekly Blog Roundup on Bankruptcy-Related Topics for the Week Ended 11/11/05

Below are notable blog posts on topical bankruptcy issues of interest to the bankruptcy litigator and practitioner for the week ending 11/11/05. Enjoy! Meanwhile, Cassie and I are off to LexThink's BlawgThink 2005 Conference, described as the "first of its kind two-day event brings together the largest group of legal bloggers ever assembled for two days of education, innovation, fellowship and fun."

Most importantly, remember our veterans today, the 87th anniversary of the end of the war that killed or wounded 37 million and was naively believed to be the "war to end all wars," only to be cruelly followed by a punishing flu pandemic the following winter than killed another between 20 and 40 million people. We, as Americans, should be most thankful for our veterans' achievements, and our founders' vision.

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