On Bankruptcy and Mediation
Maximizing value (photo by Marilyn Swanson) By: Donald L Swanson I’m in a discussion, recently, about this question: What are the best ways to maximize value of the assets of a failing business, from the perspective of a debtor’s primary secured creditor? The short answer is this: the best ways—by far—are debtor initiated processes; and the... Continue Reading →
Winners (photo by Marilyn Swanson) By: Donald L Swanson Here’s a hypothetical. Banker is trying to manage credit problems with debtor’s failing business. Debtor’s attorney offers banker a choice among these alternatives: Debtor could give the keys of the business to bank—to liquidate as bank sees fit; Bank could foreclose its liens; Bank could initiate a... Continue Reading →
By Donald L. Swanson “[T]he appellant would not have acquired priority over other creditors by the sheriff's levy, for the obvious reason that the right of property in the goods seized under the execution had previously passed” to the assignee under Debtor’s ABC. Reed v McIntyre, 98 U.S. 507, 512 (1878). Facts The Debtor, in the... Continue Reading →
By: Donald L Swanson Here are three propositions of law, based on the U.S. Supreme Court’s Clark v. White, 13 U.S. 178 (1838), opinion: absent evidence of wrongful knowledge or intent, a creditor’s efforts at racing-to-the-courthouse to collect a debt are among the basic rights of contract that cannot be abridged by the states; state laws... Continue Reading →
By: Donald L Swanson The common law of assignments for benefit of creditors ("ABCs”) has been around for a very long time as an out-of-court process under the law of trusts: debtor is trustor, assignee is trustee, and debtor’s creditors are beneficiaries. And the common law of ABCs had already been well-established, when the U.S. Constitution... Continue Reading →
By: Donald L Swanson A sweet-spot for an assignment for benefit of creditors (“ABC”) in today’s world is this: a failing business needs to liquidate; and bankruptcy laws are inadequate or too expensive. An ABC fills-in where bankruptcy doesn't work. In other words, an ABC is a state-law complement to federal bankruptcy laws . . .... Continue Reading →
By: Donald L Swanson Congress must be permitted “at long last to fashion a modern bankruptcy system which places the basic rudiments of the bankruptcy process in the hands of an expert equitable tribunal.” Granfinanciera v. Nordberg, 492 U.S. 33, 94 (1989) (Justices Blackmun and O’Connor dissenting, emphasis added). Justices Blackmun and O’Connor were right, of... Continue Reading →
A poison-pill? (Photo by Marily Swanson) By: Donald L Swanson The common law of assignments for benefit of creditors (“ABC”) has been around for centuries. ABC is a business debtor’s voluntary liquidation tool—typically utilized in cooperation with a major secured creditor. Historically, ABCs are attractive to debtors and creditors alike as an efficient, mostly out-of-court tool... Continue Reading →
By: Donald L Swanson I’m serving on a Drafting Committee of the Uniform Law Commission for a uniform law on assignment for benefit of creditors (“ABC”). A draft of such a uniform law is coming together, with lots of input from many people and organizations. But we are always looking for more input. So, if you'd like to participate... Continue Reading →
By: Donald L SwansonI’m serving on a Drafting Committee of the Uniform Law Commission for a uniform law on assignment for benefit of creditors (“ABC”). A draft of such a uniform law is coming together, with lots of input from many people and organizations. And we are always looking for more input! At one point, I’m... Continue Reading →
MEDIATBANKRY 