Rethinking Fairness in Bankruptcy Proceedings

American Bankruptcy Law Journal

Volumn 73, Issue 2, 1999, Pages 449-482

  Girth, Marjorie L ^a  

^a GEORGIA STATE UNIVERSITY   (United States)

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EID: 0347918003     PISSN: 00279048     EISSN: None     Source Type: Journal    
DOI: None     Document Type: Article

References (252)

1. KAREN GROSS, FAILURE AND FORGIVENESS: REBALANCING THE BANKRUPTCY SYSTEM (1997).
2. See id. at 14-24, 244.
3. See id. at 240.
4. See id. at 19-24 (defining "community" in the context of bankruptcy: "The particular communities that the bankruptcy system should recognize are those with a substantial nexus to the debtor. This group would then include the communities in which the debtor lives, works, and conducts business." Id. at 19-20). Professor Gross is not alone in utilizing this perspective. See, e.g., Ronald J. Mann, Bankruptcy and the Entitlements of the Government: Whose Money is It Anyway?. 70 N.Y.U. L. REV. 993 (1995).
5. Karen Gross, Taking Community Interests into Account in Bankruptcy: An Essay, 72 WASH. U. L.Q. 1031 (1994).
6. Having evaluated them on that limited basis, he found Professor Gross' suggestions to be unacceptable. Hon. Barry S. Schermer, Response to Professor Gross: Taking the Interests of the Community into Account in Bankruptcy - A Modern Tale of Betting the Cat, 72 WASH. U. L.Q. 1049 (1994).
7. See GROSS, supra note 1, at 3. For an enthusiastic reaction to this effort, see Susan Block-Lieb, A Humanistic Vision of Bankruptcy Law, 6 AM. BANKR. INST. L. REV. 471 (1998).
8. See id. at 91.
9. By contrast, secured creditors do have an enforceable interest in particular items, such as an individual debtor's home or automobile, and, in business cases, inventory or equipment, and their claims will be collectible from that collateral. See 11 U.S.C. § 506 (1994).
10. See 11 U.S.C. § 101 et seq. (1994).
11. See id. § 303. For a discussion of the reasons why creditors find proof of the grounds for an involuntary petition to be difficult, see Susan Block-Lieb, Why Creditors File So Few Involuntary Petitions and Why The Number Is Hot Too Small, 57 BROOK. L. REV. 803 (1991). From 1970 through 1988, the percentage of involuntary filings did not exceed 0.61%. Id. app. A at 863. With significantly increased filings in the years since 1988, the percentage of involuntary petitions is even smaller. During the twelve-month period ending on March 31, 1999, creditors instituted only 809 of the 1,419,199 bankruptcy petitions that were filed, or .00057 percent. U.S. Bankruptcy Court Statistical Table F2B for the indicated period, prepared by the Administrative Office of the U.S. Courts, Washington, D.C.
12. See 11 U.S.C. § 727(a)(I) (1994).
13. See John C. McCoid, II, The Origins of Voluntary Bankruptcy, 5 BANKR. DEV. J. 361 (1987-1988). Professor McCoid has also provided an analysis of the earlier development of a discharge in Great Britain's bankruptcy law. John C. McCoid, II, Discharge: The Most Important Development in Bankruptcy History, 70 AM. BANKR. L.J. 163 (1996).
14. See John C. McCoid, II, The Origins of Voluntary Bankruptcy, 5 BANKR. DEV. J. 361 (1987-1988). Professor McCoid has also provided an analysis of the earlier development of a discharge in Great Britain's bankruptcy law. John C. McCoid, II, Discharge: The Most Important Development in Bankruptcy History, 70 AM. BANKR. L.J. 163 (1996).
15. See Gross, supra note 1, at 93.
16. For a description of the complexities inherent in a "transactional model" of forgiveness, see BEVERLY FLANIGAN, FORGIVING THE UNFORGIVABLE 5-9 (1994).
17. CHARLES WARREN, BANKRUPTCY IN UNITED STATES HISTORY 82 (1935).
18. See id. at 85.
19. See Charles Jordan Tabb, A Century of Regress or Progress? A Political History of Bankruptcy Legislation in 1898 and 1998, 15 BANKR. DEV. J. 343, (1999).
20. See 11 U.S.C. § 303(a) (1994).
21. Id. § 707(b).
22. Id.
23. H.R. 3150, 105th Cong. § 101 (1998), amending 11 U.S.C. §§ 109 and 101.
24. H.R. 833, 106th Cong. § 102 (1999); S. 625, 106th Cong. § 102 (1999).
25. H.R. 833, 106th Cong. § 102 (1999); S. 625, 106th Cong. § 102 (1999).
26. See Warren, supra note 16, at 143.
27. 292 U.S. 234, 244 (1934).
28. See FLANIGAN, supra note 15, at 6.
29. See LAUREN WISPE, THE PSYCHOLOGY OF SYMPATHY 57 (Elliot Aronson ed., 1991).
30. See GROSS, supra note 1, at 104.
31. See id. at 109.
32. See id. at 130.
33. Karen Gross, Introducing a Debtor Education Program Into the U.S. Bankruptcy System: A Roadmap for Change (July 7, 1997) (unpublished manuscript on file with the author).
34. The Commission's Recommendation 1.1.5 reads: "Financial Education. All Debtors in both Chapter 7 and Chapter 13 should have the Opportunity to Participate in a Financial Education Program," NATIONAL BANKRUPTCY REVIEW COMMISSION, BANKRUPTCY THE NEXT TWENTY YEARS 2 (1997).
35. See H.R. 3150, 105th Cong. § 112 (1998); S. 1301, 105th Cong. § 321(f) (1998); H.R. 833, 106th Cong. § 104 (1999); S. 625, 106th Cong. § 104 (1999).
36. Mission Statement from the Coalition for Consumer Bankruptcy Debtor Education 1 (May 1998) (on file with the author, who serves on the Coalition's Board of Directors).
37. The Bankruptcy Code limits Chapter 7 discharges to individuals. 11 U.S.C. § 727(a)(1) (1994).
38. Title 11 U.S.C. § 707(b)(1994) allows such motions to be filed only against petitioners with "primarily consumer debts." Section 101(8) defines "consumer debt" as one that is "incurred primarily for a personal, family or household purpose."
39. See 11 U.S.C. § 707(b) (1994).
40. Requirements for a Chapter 13 case are set forth at 11 U.S.C. §§ 1301-1330 (1994).
41. See 11 U.S.C. § 303(a)(1994).
42. See Gross, supra note 1, at 118. For a description of a lawyer's influence on the client's choice between filing a Chapter 7 and a Chapter 13, see Jean Braucher, Lawyers and Consumer Bankruptcy: One Code, Many Cultures, 67 AM. BANKR. L.J. 501, 553-61 (1993); Gary Neustadter, When Lawyer And Client Meet: Observations of Interviewing And Counseling Behavior In The Consumer Bankruptcy Law Office, 35 BUFF. L. REV. 177, 228-43 (1986); and William C. Whitford, The Ideal of Individualized Justice: Consumer Bankruptcy as Consumer Protection and Consumer Protection in Consumer Bankruptcy, 68 AM. BANKR. L. J. 397 (1994). An analysis of the ways in which bankruptcy judges' and trustees' preferences also affect attorneys' advice appears in Teresa A. Sullivan et al. The Persistence of Local Legal Culture: Twenty Years of Evidence from the Federal Bankruptcy Courts, 17 HARV. J. L. & PUB. POL'Y 801 (1994). Early comparative data from Western European developments are reported in Jay Lawrence Westbrook, Local Legal Culture and the Fear of Abuse, 6 AM. BANKR. INST. L. REV. 25 (1998).
43. See Gross, supra note 1, at 118. For a description of a lawyer's influence on the client's choice between filing a Chapter 7 and a Chapter 13, see Jean Braucher, Lawyers and Consumer Bankruptcy: One Code, Many Cultures, 67 AM. BANKR. L.J. 501, 553-61 (1993); Gary Neustadter, When Lawyer And Client Meet: Observations of Interviewing And Counseling Behavior In The Consumer Bankruptcy Law Office, 35 BUFF. L. REV. 177, 228-43 (1986); and William C. Whitford, The Ideal of Individualized Justice: Consumer Bankruptcy as Consumer Protection and Consumer Protection in Consumer Bankruptcy, 68 AM. BANKR. L. J. 397 (1994). An analysis of the ways in which bankruptcy judges' and trustees' preferences also affect attorneys' advice appears in Teresa A. Sullivan et al. The Persistence of Local Legal Culture: Twenty Years of Evidence from the Federal Bankruptcy Courts, 17 HARV. J. L. & PUB. POL'Y 801 (1994). Early comparative data from Western European developments are reported in Jay Lawrence Westbrook, Local Legal Culture and the Fear of Abuse, 6 AM. BANKR. INST. L. REV. 25 (1998).
44. See Gross, supra note 1, at 118. For a description of a lawyer's influence on the client's choice between filing a Chapter 7 and a Chapter 13, see Jean Braucher, Lawyers and Consumer Bankruptcy: One Code, Many Cultures, 67 AM. BANKR. L.J. 501, 553-61 (1993); Gary Neustadter, When Lawyer And Client Meet: Observations of Interviewing And Counseling Behavior In The Consumer Bankruptcy Law Office, 35 BUFF. L. REV. 177, 228-43 (1986); and William C. Whitford, The Ideal of Individualized Justice: Consumer Bankruptcy as Consumer Protection and Consumer Protection in Consumer Bankruptcy, 68 AM. BANKR. L. J. 397 (1994). An analysis of the ways in which bankruptcy judges' and trustees' preferences also affect attorneys' advice appears in Teresa A. Sullivan et al. The Persistence of Local Legal Culture: Twenty Years of Evidence from the Federal Bankruptcy Courts, 17 HARV. J. L. & PUB. POL'Y 801 (1994). Early comparative data from Western European developments are reported in Jay Lawrence Westbrook, Local Legal Culture and the Fear of Abuse, 6 AM. BANKR. INST. L. REV. 25 (1998).
45. See Gross, supra note 1, at 118. For a description of a lawyer's influence on the client's choice between filing a Chapter 7 and a Chapter 13, see Jean Braucher, Lawyers and Consumer Bankruptcy: One Code, Many Cultures, 67 AM. BANKR. L.J. 501, 553-61 (1993); Gary Neustadter, When Lawyer And Client Meet: Observations of Interviewing And Counseling Behavior In The Consumer Bankruptcy Law Office, 35 BUFF. L. REV. 177, 228-43 (1986); and William C. Whitford, The Ideal of Individualized Justice: Consumer Bankruptcy as Consumer Protection and Consumer Protection in Consumer Bankruptcy, 68 AM. BANKR. L. J. 397 (1994). An analysis of the ways in which bankruptcy judges' and trustees' preferences also affect attorneys' advice appears in Teresa A. Sullivan et al. The Persistence of Local Legal Culture: Twenty Years of Evidence from the Federal Bankruptcy Courts, 17 HARV. J. L. & PUB. POL'Y 801 (1994). Early comparative data from Western European developments are reported in Jay Lawrence Westbrook, Local Legal Culture and the Fear of Abuse, 6 AM. BANKR. INST. L. REV. 25 (1998).
46. See Gross, supra note 1, at 118. For a description of a lawyer's influence on the client's choice between filing a Chapter 7 and a Chapter 13, see Jean Braucher, Lawyers and Consumer Bankruptcy: One Code, Many Cultures, 67 AM. BANKR. L.J. 501, 553-61 (1993); Gary Neustadter, When Lawyer And Client Meet: Observations of Interviewing And Counseling Behavior In The Consumer Bankruptcy Law Office, 35 BUFF. L. REV. 177, 228-43 (1986); and William C. Whitford, The Ideal of Individualized Justice: Consumer Bankruptcy as Consumer Protection and Consumer Protection in Consumer Bankruptcy, 68 AM. BANKR. L. J. 397 (1994). An analysis of the ways in which bankruptcy judges' and trustees' preferences also affect attorneys' advice appears in Teresa A. Sullivan et al. The Persistence of Local Legal Culture: Twenty Years of Evidence from the Federal Bankruptcy Courts, 17 HARV. J. L. & PUB. POL'Y 801 (1994). Early comparative data from Western European developments are reported in Jay Lawrence Westbrook, Local Legal Culture and the Fear of Abuse, 6 AM. BANKR. INST. L. REV. 25 (1998).
47. See Gross, supra note 1, at 116.
48. For a discussion of the difficulties that small businesses have in gaining access to capital and credit, see Donald R. Korobkin, Vulnerability, Survival, and the Problem of Small Business Bankruptcy, 23 CAP. U. L. REV. 413 (1994).
49. As of April 1, 1998, Chapter 13 is available to them only if their noncontingent, liquidated, unsecured debts are less than $269,250 and their noncontingent, liquidated, secured debts are less than $807,750. If their debts exceed these limits, in order to reorganize they must use Chapter 11's more complicated procedures. See 11 U.S.C. §§ 109(e), 104(b) (1994).
50. GROSS, supra note 1, at 119.
51. See Jean Braucher, Increasing Uniformity in Consumer Bankruptcy: Means Testing as a Distraction and the National Bankruptcy Review Commission's Proposal as a Starting Point, 6 AM. BANKR. INST. L. REV. 1 (1998). Elizabeth Warren, the Commission's Reporter, provides a personal analysis of why the Commission rejected the means test in A Principled Approach to Consumer Bankruptcy, 71 AM. BANKR. L.J. 483, 503-06 (1997).
52. See Jean Braucher, Increasing Uniformity in Consumer Bankruptcy: Means Testing as a Distraction and the National Bankruptcy Review Commission's Proposal as a Starting Point, 6 AM. BANKR. INST. L. REV. 1 (1998). Elizabeth Warren, the Commission's Reporter, provides a personal analysis of why the Commission rejected the means test in A Principled Approach to Consumer Bankruptcy, 71 AM. BANKR. L.J. 483, 503-06 (1997).
53. H.R. 3150, 105th Cong. § 101 (1998); S. 1301, 105th Cong. § 102 (1998); H.R. 833, 106th Cong. § 102 (1999); S. 625, 106th Cong. § 102 (1999).
54. See 11 U.S.C. § 523(a) (1994). For a thorough discussion of the historical background and current status of judicial interpretation of the types of debts that creditors most frequently seek to have excepted from a consumer's discharge, see George H. Singer, Section 523 of the Bankruptcy Code: The Fundamentals of Nondischargeability in Consumer Bankruptcy, 71 AM. BANKR. L.J. 325 (1997) and William C. Whitford, Changing Definitions of Fresh Start in U.S. Bankruptcy Law, 20 J. CONSUMER POL'Y 179, 1885-87 (1997).
55. See 11 U.S.C. § 523(a) (1994). For a thorough discussion of the historical background and current status of judicial interpretation of the types of debts that creditors most frequently seek to have excepted from a consumer's discharge, see George H. Singer, Section 523 of the Bankruptcy Code: The Fundamentals of Nondischargeability in Consumer Bankruptcy, 71 AM. BANKR. L.J. 325 (1997) and William C. Whitford, Changing Definitions of Fresh Start in U.S. Bankruptcy Law, 20 J. CONSUMER POL'Y 179, 1885-87 (1997).
56. See 11 U.S.C. § 1328(a) (1994).
57. See id. § 1322(b)(5) (1978).
58. See id. §§ 523(a)(5), 1328(a) (1978).
59. For data concerning percentages proposed for confirmation in Chapter 13 plans, see Sullivan et al, supra note 40, at 832-33; Whitford, supra note 40, at 410; Marjorie L. Girth, The Role of Empirical Data in Developing Bankruptcy Legislation for Individuals, 65 IND. L. REV. 17, 42-43 (1989); and Marjorie Girth, The Bankruptcy Reform Process: Maximizing Judicial Control in Wage Earners' Plans, 11 U. MICH. J.L. REFORM 51, 57-58 (1977).
60. For data concerning percentages proposed for confirmation in Chapter 13 plans, see Sullivan et al, supra note 40, at 832-33; Whitford, supra note 40, at 410; Marjorie L. Girth, The Role of Empirical Data in Developing Bankruptcy Legislation for Individuals, 65 IND. L. REV. 17, 42-43 (1989); and Marjorie Girth, The Bankruptcy Reform Process: Maximizing Judicial Control in Wage Earners' Plans, 11 U. MICH. J.L. REFORM 51, 57-58 (1977).
61. See 11 U.S.C. § 1325(a)(4) (1994).
62. A chart prepared by the Bankruptcy Division of the Administrative Office of the United States Courts shows that 97.1 percent of the nonbusiness Chapter 7 cases that were closed during the year ended September 30, 1995 were no-asset cases. Statistical Information Compiled By the Administrative Office of the United States Courts (copy available from the Administrative Office of the United States Courts).
63. See 11 U.S.C. § 1328 (a)(c) (1994).
64. See H.R. 833, 106th Cong. § 129 (1999); S. 625, 106th Cong. § 314 (1999).
65. See Gross, supra note 1, at 126. Such expanded liability is in addition to the basic fiduciary responsibility which officers and directors owe to the company and its shareholders.
66. See 11 U.S.C. § 523(a)(4) (1994). Recent cases in the United States Courts of Appeal sustaining exceptions from discharge based upon embezzlement in a business setting include Brady v. McAllister (In re Brady), 101 F.3d 1165 (6th Cir. 1996) and Wolstein v. Docteroff (In re Docteroff), 133 F.3d 210 (3d Cir. 1997). A more recent Fifth Circuit opinion remanded the matter for a determination of whether the intent required by § 523(a)(4) existed. Miller v. J.D. Abrams, Inc. (In re Miller), 156 F.3d 598 (5th Cir. 1998).
67. 11 U.S.C. § 523(a)(11)-(12) (1994).
68. Meyer v. Rigdon, 36 F.3d 1375 (7th Cir. 1994).
69. See id. at 1377.
70. Id. at 1385. Numerous subsequent opinions relying upon Meyer have turned upon whether "more than mere negligence" could be found in particular factual scenarios. Examples include Chase Lumber & Fuel Co. (In re Koch,) 197 B.R. 654 (Bankr. W.D. Wis. 1996); Antlers Roof-Tuss & Builders Supply v. Storie (In re Ellenbogen), 218 B.R. 709 (Bankr. S.D.N.Y. 1998); and Zohlman v. Zoldan, 226 B.R. 767 (S.D.N.Y. 1998).
71. In re Storie, 216 B.R. 283 (B.A.P. 10th Cir. 1997).
72. Storie has been followed by Klenda v. Hogue (In re Hogue), 221 B.R. 786 (Bankr. N.D. Okla. 1998), which similarly held the debt of a trustee for an inter vivos trust to be nondischargeable based upon his negligent failure to stay informed about transactions involving the trust.
73. 11 U.S.C. § 523(e) (1994). The definition of "institution-affiliated party" can be found at 12 U.S.C. § 1813(u) (1994) and includes a wide range of possible participants in wrongdoing that might cause "more than a minimal financial loss."
74. See 7 U.S.C. § 499e (1994).
75. See Bartholomew M. Botta, Personal Liability for Corporate Debts: The Reach of the Perishable Agricultural Commodities Act Continues to Expand, 2 DRAKE J. AGRIC. L. 339 (1997), for its discussion of the implications of the extensions of liability authorized by Sunkist Growers, Inc. v. Fisher, 104 F.3d 280 (9th Cir. 1997) and Shepard v. K.B. Fruit and Vegetable, Inc., 868 F. Supp. 703 (E.D. Pa. 1994) at 348-51. Both cases have since been disagreed with by Farm-Wey Produce, Inc. v. Wayne L. Bowman Co., Inc., 973 F. Supp. 778 (E.D. Tenn. 1997).
76. See Botta, supra note 66, at 352-55.
77. The concept of the "primary actor responsible for [the corporation's] failure to live up to its fiduciary responsibilities under PACA" might prove to be useful in this context if one wished to limit the extent of vulnerability. Bronia, Inc. v. Ho, 873 F. Supp. 854 (S.D.N.Y. 1995), quoted in Botta, supra note 66, at 346.
78. For a discussion of the current protection of employees' "constituency interests," see Donald R. Korobkin, Employee Interests in Bankruptcy, 4 AM. BANKR. INST. L. REV. 5, 11-14 (1996).
79. Cf. 11 U.S.C. § 523 (a)(3) (1994).
80. See supra text accompanying notes 59-63.
81. See GROSS, supra note 1, at 138-42.
82. U.C.C. Article 9 (West. Supp. 1998).
83. See GROSS, supra note 1, at 91.
84. See id. at 155-57.
85. For recent installments of this debate, see Lucian Arye Bebchuk & Jesse M. Fried, The Uneasy Case for the Priority of Secured Claims in Bankruptcy, 105 YALE L.J. 857 (1996); Steven L. Schwarcz, The Easy Case for the Priority of Secured Claims in Bankruptcy, 47 DUKE L.J. 425 (1997); Symposium, The Uneasy Case for the Priority of Secured Claims in Bankruptcy: Further Thoughts and a Reply to Critics, 82 CORNELL L. REV. 1279 (1997); Jesse M. Fried, Taking the Economic Costs of Priority Seriously, 51 CONSUMER FIN. L.Q. REP. 328 (1997).
86. For recent installments of this debate, see Lucian Arye Bebchuk & Jesse M. Fried, The Uneasy Case for the Priority of Secured Claims in Bankruptcy, 105 YALE L.J. 857 (1996); Steven L. Schwarcz, The Easy Case for the Priority of Secured Claims in Bankruptcy, 47 DUKE L.J. 425 (1997); Symposium, The Uneasy Case for the Priority of Secured Claims in Bankruptcy: Further Thoughts and a Reply to Critics, 82 CORNELL L. REV. 1279 (1997); Jesse M. Fried, Taking the Economic Costs of Priority Seriously, 51 CONSUMER FIN. L.Q. REP. 328 (1997).
87. For recent installments of this debate, see Lucian Arye Bebchuk & Jesse M. Fried, The Uneasy Case for the Priority of Secured Claims in Bankruptcy, 105 YALE L.J. 857 (1996); Steven L. Schwarcz, The Easy Case for the Priority of Secured Claims in Bankruptcy, 47 DUKE L.J. 425 (1997); Symposium, The Uneasy Case for the Priority of Secured Claims in Bankruptcy: Further Thoughts and a Reply to Critics, 82 CORNELL L. REV. 1279 (1997); Jesse M. Fried, Taking the Economic Costs of Priority Seriously, 51 CONSUMER FIN. L.Q. REP. 328 (1997).
88. For recent installments of this debate, see Lucian Arye Bebchuk & Jesse M. Fried, The Uneasy Case for the Priority of Secured Claims in Bankruptcy, 105 YALE L.J. 857 (1996); Steven L. Schwarcz, The Easy Case for the Priority of Secured Claims in Bankruptcy, 47 DUKE L.J. 425 (1997); Symposium, The Uneasy Case for the Priority of Secured Claims in Bankruptcy: Further Thoughts and a Reply to Critics, 82 CORNELL L. REV. 1279 (1997); Jesse M. Fried, Taking the Economic Costs of Priority Seriously, 51 CONSUMER FIN. L.Q. REP. 328 (1997).
89. See Gross, supra note 1, at 168-73.
90. See id. at 163-64.
91. See id. at 147-55; 11 U.S.C. § 507 (1994).
92. GROSS, supra note 1, at 164.
93. TERESA A. SULLIVAN ET AL., As WE FORGIVE OUR DEBTORS (1989).
94. See id. at 293-301.
95. See, e.g., Lynn M. LoPucki, The Unsecured Creditor's Bargain, 80 VA. L. REV. 1887, 1896-1916 (1994). More recently, the debate has focused upon whether debtor firms could render themselves judgment proof in any event. See Lynn M. LoPucki, The Essential Structure of Judgment Proofing, 51 STAN. L. REV. 147 (1998).
96. See, e.g., Lynn M. LoPucki, The Unsecured Creditor's Bargain, 80 VA. L. REV. 1887, 1896-1916 (1994). More recently, the debate has focused upon whether debtor firms could render themselves judgment proof in any event. See Lynn M. LoPucki, The Essential Structure of Judgment Proofing, 51 STAN. L. REV. 147 (1998).
97. GROSS, supra note 1, at 173.
98. The examples which she chooses to compare are a reluctant trade creditor, a tort victim, and an insider who thought that a loan would be repaid. See id. at 168-169.
99. Id. at 137-38.
100. See id. at 169-73. During the recent effort to revise Article 9 of the Uniform Commercial Code, a narrower alternative proposal would have "carved out" twenty percent of the value of the secured creditors' collateral in personal property for the benefit of "nonadjusting" judgment lien creditors. Its merits were debated by Professors William J. Woodward, Jr. and James J. White in The Slippery Slope to Bankruptcy: Should Some Claimants Get a "Carve Out" From Secured Credit," 7-FEB BUS. L. TODAY 32 (1998).
101. For another argument for increasing attention to "substantive unconscionability alone," see Jeffrey L. Harrison, Class, Personality, Contract and Unconscionability 35 WM. & MARY L. REV. 445, 489-93 (1994).
102. See 11 U.S.C. § 726(a)(2) (1994).
103. See U.C.C. § 2-302 (West Supp. 1998).
104. Id. § 2-302(a).
105. THe current list can be found at 11 U.S.C. § 507(a) (1994). Further discussion of where in the current list of priorities such claims might fall appears in the text accompanying notes 103-107 infra in the discussion of overall priorities. For an analysis of the impact of limited liability upon tort victims, see David W. Leebron, Limited Liability. Tort Victims and Creditors, 91 COLUM. L. REV. 1565 (1991). For the suggestion that pro rata shareholder liability might be preferable to the present system, see Henry Hansmann and Reineier Kraakman, Toward Unlimited Shareholder Liability for Corporate Torts, 100 YALE L.J. 1879 (1991).
106. THe current list can be found at 11 U.S.C. § 507(a) (1994). Further discussion of where in the current list of priorities such claims might fall appears in the text accompanying notes 103-107 infra in the discussion of overall priorities. For an analysis of the impact of limited liability upon tort victims, see David W. Leebron, Limited Liability. Tort Victims and Creditors, 91 COLUM. L. REV. 1565 (1991). For the suggestion that pro rata shareholder liability might be preferable to the present system, see Henry Hansmann and Reineier Kraakman, Toward Unlimited Shareholder Liability for Corporate Torts, 100 YALE L.J. 1879 (1991).
107. See GROSS, supra note 1, at 167 (pointing out that "courts have increasingly imposed sanctions on both clients and attorneys who bring frivolous suits.") Id. A provision patterned on § 523(d)'s nondischargeability litigation would be one possible sanction. It awards costs and a reasonable attorney's fee to the debtor if the creditor's § 523(a)(2) allegation "was not substantially justified." 11 U.S.C. § 523(d) (1994).
108. This situation exists because in recent years, cases involving mass tort claims have created extraordinary reorganization efforts. For examples of litigation regarding the status of claimants in mass tort situations see Robinson v. Johns-Manville Corp. (In re Johns-Manville Corp.), 52 B.R. 940 (S.D.N.Y., 1985); Grady v. A. H. Robins Co., 839 F. 2d 198 (4th Cir. 1988); and UNR Industries, Inc. v. Walker, et al. (In re UNR Industries, Inc.), 224 B.R. 664 (Bankr. N.D. Ill. 1998). The National Bankruptcy Review Commission's recommendations for dealing with this type of litigation are discussed in Sheldon S. Toll, Bankruptcy and Mass Torts: The Commission's Proposal, 5 AM. BANKR. INST. L. REV. 363 (1997).
109. See Dore & Assocs. Contracting, Inc. v. United States (In re Dore), 45 B.R. 758, 762 (Bankr. E.D. Mich. 1985), for a statement of the traditional bases for awarding relief in the context of the Internal Revenue Service's efforts to collect tax liabilities.
110. Precedent does exist for injunctive relief to compel payments. One recent example involved the trustees of the Anthracite Health and Welfare Fund, who were successful in compelling interim payments by an employer that had attempted to withdraw from a multi-employer pension plan. Galgay v. Beaverbrook Coal Co., 105 F. 3d 137 (3d Cir. 1997). The question of the employer's withdrawal liability was being arbitrated, causing the employer to seek to be excused from making payments until the arbitration was decided.
111. See Gross, supra note 1, at 167.
112. See id. at 166-67.
113. H. at 165.
114. Use of interim payments and the appropriateness of the amount of the resulting reserve was upheld in In re Forty-Eight Insulations, Inc., 115 F.3d 1294 (7th Cir. 1997), discussed further in the decision following remand, Maritime Asbestos Claimants v. Allison, 214 B.R. 179 (N.D. Ill. 1997).
115. See 11 U.S.C. § 331 (1994).
116. An effective sanction against the assertion of frivolous claims would again need to be devised. See supra note 93.
117. See Gross, supra note 1, at 152-53.
118. See id. at 153-54.
119. My colleagues and I made this recommendation nearly thirty years ago when we took a first look at the impact of the federal bankruptcy system in selected districts across the nation. DAVID T. STANLEY ET AL, BANKRUPTCY: PROBLEM, PROCESS, REFORM 209 (1971).
120. See 11 U.S.C. § 523(a)(1)(A) (1994), with its cross-references to 11 U.S.C. §§ 507(a)(2) and (a)(8) (1994).
121. See GROSS, supra note 1, at 151-52.
122. H.R. 833, 106th Cong. § 142 (1999); S. 625, 106th Cong, § 211 (1999).
123. See STANLEY ET AL., supra note 105, at 209.
124. See 11 U.S.C. § 1102 (1994), which also provides for committees representing equity security holders. However, creditors must be paid in full before equity security holders receive any distribution under the "absolute priority" rule of 11 U.S.C. § 1129(b)(2)(B) (1994). Because few reorganization plans are able to pay one hundred percent to all creditors, it is the creditors' committee or committees that initially play the most significant role.
125. See 11 U.S.C. § 1107 (1994).
126. See id. § 1103.
127. See Lynn M. LoPucki, The Debtor in Full Control - Systems Failure under Chapter 11 of the Bankruptcy Code, 57 AM.BANKR. L.J. 247, 249-53 (1983); Jerome R. Kerkman, The Debtor in Full Control: A Case for Adoption of the Trustee System, 70 MARQ. L. REV 159, 182-87 (1987); Edward S. Adams, Governance in Chapter 11 Reorganizations: Reducing Costs, Improving Results, 73 B.U. L. REV. 581, 613-15 (1993).
128. See Lynn M. LoPucki, The Debtor in Full Control - Systems Failure under Chapter 11 of the Bankruptcy Code, 57 AM.BANKR. L.J. 247, 249-53 (1983); Jerome R. Kerkman, The Debtor in Full Control: A Case for Adoption of the Trustee System, 70 MARQ. L. REV 159, 182-87 (1987); Edward S. Adams, Governance in Chapter 11 Reorganizations: Reducing Costs, Improving Results, 73 B.U. L. REV. 581, 613-15 (1993).
129. See Lynn M. LoPucki, The Debtor in Full Control - Systems Failure under Chapter 11 of the Bankruptcy Code, 57 AM.BANKR. L.J. 247, 249-53 (1983); Jerome R. Kerkman, The Debtor in Full Control: A Case for Adoption of the Trustee System, 70 MARQ. L. REV 159, 182-87 (1987); Edward S. Adams, Governance in Chapter 11 Reorganizations: Reducing Costs, Improving Results, 73 B.U. L. REV. 581, 613-15 (1993).
130. See Daniel J. Bussel, Coalition-Building Through Bankruptcy Creditors' Committees, 43 UCLA L. REV. 1547, 1562-70 (1996).
131. See Carl A. Eklund & Lynn W. Roberts, The Problem with Creditors' Committees in Chapter 11: How to Manage the Inherent Conflicts Without Loss of Function, 5 AM. BANKR. INST. L. REV. 129, 141-43 (1997).
132. See Bussel, supra note 114, at 1598.
133. See Gross, supra note 1, at 161.
134. See, e.g., In re Dow Corning Corp, 194 B.R. 121 (Bankr. E.D. Mich. 1996), rev'd on other grounds, In re Dow Corning Corp, 212 B.R. 258 (E.D. Mich. 1997); Peter C. Blain & Diane Harrison O'Gawa, Creditors' Committees Under Chapter 11 of the United States Bankruptcy Code: Creation, Composition, Powers and Duties, 73 MARQ. L. REV. 581, 591-94 (1990).
135. See In re Shaffer-Gordon Assocs., Inc., 40 B.R. 956, 958 (Bankr. E.D. Pa. 1984); In re Value Merchants, Inc., In re Everything's A Dollar, Inc., 202 B.R. 280, 286 (E.D. Wis. 1996).
136. For a discussion of how an additional committee representing employees might function, see Donald R. Korobkin, Employee Interests in Bankruptcy, 4 AM. BANKR. INST. L. REV. 5, 28-32 (1996).
137. See GROSS, supra note 1, at 160-61; 11 U.S.C. § 1102 (b)(1) (1994).
138. See 11 U.S.C. § 1102(a)(1) (1994). See, supra notes 118-19 and cases cited therein.
139. See 11 U.S.C. § 1102(c) (1978), repealed by Pub. L. No. 99-554, 100 Stat. 3088 § 221(2). For a discussion of legislative developments affecting the appointing power, see Kenneth N. Klee & K. John Shaffer, Creditors' Committees Under Chapter 11 of the Bankruptcy Code, 44 S.C. L. REV. 995, 998-1002 (1993). In 1997, the National Bankruptcy Review Commission recommended amending the Bankruptcy Code to restore the explicit authority of bankruptcy judges to alter the composition of creditors' committees. See Lawrence K. Snider and John J. Voorhees, Jr., Recent Decisions Concerning Creditors' Committees, 8 AM. BANKR. INST. L. REV. 42 (1999).
140. See 11 U.S.C. § 1102(c) (1978), repealed by Pub. L. No. 99-554, 100 Stat. 3088 § 221(2). For a discussion of legislative developments affecting the appointing power, see Kenneth N. Klee & K. John Shaffer, Creditors' Committees Under Chapter 11 of the Bankruptcy Code, 44 S.C. L. REV. 995, 998-1002 (1993). In 1997, the National Bankruptcy Review Commission recommended amending the Bankruptcy Code to restore the explicit authority of bankruptcy judges to alter the composition of creditors' committees. See Lawrence K. Snider and John J. Voorhees, Jr., Recent Decisions Concerning Creditors' Committees, 8 AM. BANKR. INST. L. REV. 42 (1999).
141. 11 U.S.C. § 1102(a)(2) (1994).
142. See, e.g., Masters, Mates & Pilots Plans v. Lykes Bros. Steamship Co. (In re Lykes Bros. Steamship Co.), 200 B.R. 933 (M.D. Fla. 1996).
143. See, e.g., In re Voluntary Purchasing Groups, Inc., 1997 WL 155407 (E.D. Tex. 1997).
144. For a summary of developments on this question, see In re Mercury Finance Co., 224 B.R. 380 (Bankr. ND. Ill. 1998).
145. See, e.g., In re Barney's, Inc., 197 B.R. 431, 439 (Bankr. S.D.N.Y. 1996); 11 U.S.C. §105(a) (1994).
146. 11 U.S.C. § 1102(b)(1) (1994).
147. See GROSS, supra note 1, at 184-90.
148. See 11 U.S.C. §§ 1101-1173 (1994).
149. See 11 U.S.C. §§ 701-766 (1994); Viking Assocs., L.L.C. v. Drewes (In re Olson), 120 F.3d 98 (8th Cir. 1997).
150. See 11 U.S.C. §§ 1301-1330 (1994); Jordan v. Colorado Student Loan Program (In re Jordan), 146 B.R. 31 (D. Colo. 1992).
151. FED. R. BANKR. P. 3001(e) (1988) (prior to 1991 revision).
152. FED. R. BANKR. P. 3001(e) (revised Aug. 1, 1991).
153. GROSS, supra note 1, at 189-90.
154. See Michael H. Whitaker, Regulating Claims Trading in Chapter 11 Bankruptcies: A Proposal for Mandatory Disclosure, 3 CORNELL J. L. & PUB. POL'Y 303, 336-42 (1994).
155. Frederick Tung, Confirmation and Claims Trading, 90 Nw. U. L. REV. 1684, 1748-54 (1996).
156. See Thomas Donegan, Covering the "Security Blanket": Regulating Bankruptcy Claims and Claim-Participations Trading Under the Federal Securities Laws, 14 BANKR. DEV. J. 381 (1998); 15 U.S.C. § 78j(b) (1994).
157. See the discussion of "irreparable harm" supra text accompanying notes 93-102.
158. See, e.g., In re Allegheny Int'l, Inc., 100 B.R. 241 (Bankr. W.D. Pa. 1988).
159. See, e.g., In re Revere Copper and Brass, Inc., 58 B.R. 1 (Bankr. S. D. N.Y. 1985).
160. I43 "Insiders" for a corporation include officers and directors. 11 U.S.C. § 101(31) (1994).
161. See CitiCorp Venture Capital, Ltd. v. Committee of Creditors Holding Unsecured Claims (In re Papercraft Corp.), 211 B.R. 813 (Bankr. W.D. Pa. 1997), aff'd, 160 F.3d 982 (3d Cir. 1998).
162. See 28 U.S.C. § 586(a)(3) (1994).
163. See Gross, supra note 1, at 187-90.
164. See id. at 184-88.
165. 11 U.S.C. § 1126(c) (1994).
166. Figter Ltd. v. Teachers Ins. and Annuity Ass'n of Am. (In re Figter Ltd.), 118 F.3d 635 (9th Cir. 1997), cert. denied, 118 S. Ct. 561 (1997).
167. Id. For a discussion of the implications of this case, see Lawrence B. Gutcho & David A. Fidler, Purchasing Claims to Block Bankruptcy "Cramdowm" Plans: A New Weapon for Creditors, 115 BANKING L.J. 4 (1998).
168. The standards for approving confirmation originated in the Bankruptcy Act of 1867, which tallied votes in terms of the number of creditors, not the number of claims. Reported decisions under that standard limited each creditor to one vote, no matter how many claims it accumulated. See Chaim J. Fortgang & Thomas Moers Mayer, Trading Claims and Taking Control of Corporations in Chapter 11, 12 CARDOZO L. REV. 1, 87-88 (1990).
169. See In re MacLeod Co., 63 B.R. 654, 656 (Bankr. S.D. Ohio 1986).
170. See In re Allegheny Int'l, Inc., 118 B.R. 282, 289-290 (Bankr. W.D. Pa. 1990); In re Applegate Property, Ltd, 133 B.R. 827, 835-36 (Bankr. W.D. Tex. 1991).
171. See In re Marin Town Ctr., 142 B.R. 374, 378-79 (N.D. Cal. 1992); Figter Ltd. v. Teachers Ins. and Annuity Ass'n of Am. (In re Figter, Ltd.), 118 F.3d 635, 639-40 (9th Cir. 1997), cert. denied, 118 S. Ct. 561 (1997).
172. See In re Pleasant Hill Partners, 163 B.R. 388, 395 (Bankr. N.D. Ga. 1994).
173. See Gross, supra note 1, at 197, 207.
174. See id. at 228.
175. Id. at 211-12.
176. Later characterized as "substantial injury" when Professor Gross drafts a legislative standard. Id. at 228.
177. See id. at 230.
178. See 11 U.S.C. § 501 (1994).
179. See id § 502.
180. See id. § 726.
181. See GROSS, supra note 1, at 206-14.
182. See 11 U.S.C. § 507(a) (1994) for administrative expenses allowed under 11 U.S.C. § 503(b) (1994).
183. See State of Oregon, Dept. of Human Resources v. Witcosky (In re Allen Care Ctrs., Inc.), 96 F.3d 1328 (9th Cir. 1996).
184. See Gross, supra note 1, at 221.
185. Id. at 228.
186. See 11 U.S.C. § 1113 (1994).
187. See Gross, supra note 1, at 229.
188. THe design of a pilot program would likely be a highly controversial step, because affected debtors would have to comply with an additional procedural requirement by comparison to others who were trying to reorganize. A number of alternatives would need to be considered in designing the pilot program. They could include a required "community impact statement" for all business reorganization cases filed under Chapter 11 for a six-month period in selected districts or any of a number of random selection processes, such as the first business reorganization case under Chapter 11 filed on or after the first day of each month for six months in all judicial districts. 172 National Environmental Policy Act of 1969 § 102, 42 U.S.C. § 4332 (1994). See Heather E. Ross, Using HEPA in the Fight for Environmental Justice, 18 WM. & MARY J. ENVTL. L. 353, 353-69, 373 (1994).
189. 42 U.S.C. § 4332(2)(C) (1994).
190. See Dean B. Suagee, The Application of the Natural Environmental Policy Act To "Development" In Indian Country, 16 AM. INDIAN L. REV. 377, 394 (1991).
191. See 11 U.S.C. § 1125(b) (1994).
192. See, e.g., Home Comp Care, Inc. v. United States Dept. of Health & Human Servs. (In re Home Comp Care, Inc.), 221 B.R. 202 (N.D. Ill. 1998); AHN Homecare, L.L.C. v. Home Health Reimbursement & Health Care Fin. Admin. (In re AHN Homecare, L.L.C.), 222 B.R. 804 (Bankr. N.D. Tex. 1998);, In re Hamlin Terrace Health Care Ctr., 211 B.R. 997 (Bankr. M.D. Fla. 1996); Sims v. United States Dept. of Health & Human Servs. (In re TLC Hospitals, Inc.), 225 B.R. 709 (N.D. Cal. 1998).
193. See Kings Terrace Nursing Home and Health Related Facility v. New York State Dept. of Soc. Servs. (In re Kings Terrace Nursing Home and Health Related Facility), 184 B.R. 200 (S.D.N.Y. 1995).
194. See In re Whittaker Memorial Hosp. Ass'n, 149 B.R. 812, 815-16 (Bankr. E.D. Va. 1993).
195. In re Independence Village Inc., 52 B.R. 715, 723-26 (Bankr. E.D. Mich. 1985).
196. First Am. Health Care of Ga., Inc. v. United States Dept. of Health & Human Servs. (In re First Am. Health Care of Ga., Inc.), 208 B.R. 985, 991 (Bankr. S.D. Ga. 1996), vacated and superseded by 1996 WL 282149 (Bankr. S.D. Ga. 1996). Although the original decision was superseded, it bought enough time for the completion of a negotiated merger that resulted in 100 percent payout to unsecured creditors. See In it First Am. Health Care of Ga, 212 B.R. 408, 409-10 (Bankr. S.D. Ga. 1997). See also In re Healthback, L.L.C., 226 B.R. 464, 476 (Bankr. W.D. Okla. 1998).
197. See, e.g., University Med. Ctr. v. United States Dept. of Health & Human Servs. (In re University Med. Ctr.), 973 F.2d 1065, (3d Cir. 1992), but see, United States v. Consumer Health Servs. of Am., Inc., 108 F.3d 390, 394-95 (D.C. Cir. 1997).
198. S. 1914, 105th Cong. Title I (1998) (introduced April 2, 1998 and referred to the Senate Committee on the Judiciary).
199. S.1914, 105th Cong. § 104 (1998). See Nancy A. Peterman, Protecting Patients' Rights in Health Care Bankruptcies, 17 AM. BANKR. INST. J. 10-11 (Sept. 1998).
200. See S. 1914, supra note 182.
201. GROSS, supra note 1, at 215-19.
202. See William N. Eskridge, Jr., Dynamic Statutory Interpretation, 135 U. PA. L. REV. 1479, 1496 (1987). In his view, "[t]he dynamic model, however, views the evolutive perspective as most important when the statutory text is not clear and the original legislative expectations have been overtaken by subsequent changes in society and law. In such cases, the pull of text and history will be slight, and the interpreter will find current policies and societal conditions most important." Id. at 1483-84. The consequences if the United States Supreme Court had used dynamic interpretation in bankruptcy cases from the 1987 through the 1993 terms are analyzed from a critical perspective by Robert K. Rasmussen, A Study of the Costs and Benfits of Textualism: The Supreme Court's Bankruptcy Cases, 71 WASH. U. L.Q. 535, 542-43, 574-90 (1993).
203. See William N. Eskridge, Jr., Dynamic Statutory Interpretation, 135 U. PA. L. REV. 1479, 1496 (1987). In his view, "[t]he dynamic model, however, views the evolutive perspective as most important when the statutory text is not clear and the original legislative expectations have been overtaken by subsequent changes in society and law. In such cases, the pull of text and history will be slight, and the interpreter will find current policies and societal conditions most important." Id. at 1483-84. The consequences if the United States Supreme Court had used dynamic interpretation in bankruptcy cases from the 1987 through the 1993 terms are analyzed from a critical perspective by Robert K. Rasmussen, A Study of the Costs and Benfits of Textualism: The Supreme Court's Bankruptcy Cases, 71 WASH. U. L.Q. 535, 542-43, 574-90 (1993).
204. "Textualism" reflects the assertion that if a statutory text has only one "plain" meaning, it must control, and the use of even traditional sources of guidance for interpretation, such as legislative history, is inappropriate. William N. Eskridge, Jr., The New Textualism, 37 U.C.L.A. L. REV. 621, 623-26, 640-56 (1990).
205. GROSS, supra note 1, at 216-17; Karen Gross, Justice Thurgood Marshall's BankruptcyJurisprudence: A Tribute, 67 AM. BANKR. L.J. 447, 456-57 (1993).
206. For examples of the views of advocates of judicial candor, see David L. Shapiro, In Defense of Judicial Candor, 100 HARV. L. REV. 731 (1987), and, in a tribute to United States Supreme Court Justice John Paul Stevens' candid approach, see Susan Estrich, The Justice of Candor, 74 TEX. L. REV. 1227 (1996). The difficulties of defining judicial candor are discussed by Scott C. Idleman, A Prudential Theory of Judicial Candor, 73 TEX. L. REV. 1307, 1316-21(1995). In that article Professor Idleman defines candor as "the full disclosure of relevant information, evaluated subjectively from the judge's point of view." Id. at 1321. Professor Idleman also analyzes the rationales supporting a goal of judicial candor, id. at 1334-76, and a series of factors that might cause the use of judicial candor to be imprudent. Id. at 1381-95. For a more recent empirical study of the linguistic devices that Supreme Court justices have used in federal jurisdiction cases, see Laura E. Little, Hiding with Words: Obfuscation, Avoidance, and Federal Jurisdiction Opinions, 46 UCLA L. REV. 75 (1998).
207. For examples of the views of advocates of judicial candor, see David L. Shapiro, In Defense of Judicial Candor, 100 HARV. L. REV. 731 (1987), and, in a tribute to United States Supreme Court Justice John Paul Stevens' candid approach, see Susan Estrich, The Justice of Candor, 74 TEX. L. REV. 1227 (1996). The difficulties of defining judicial candor are discussed by Scott C. Idleman, A Prudential Theory of Judicial Candor, 73 TEX. L. REV. 1307, 1316-21(1995). In that article Professor Idleman defines candor as "the full disclosure of relevant information, evaluated subjectively from the judge's point of view." Id. at 1321. Professor Idleman also analyzes the rationales supporting a goal of judicial candor, id. at 1334-76, and a series of factors that might cause the use of judicial candor to be imprudent. Id. at 1381-95. For a more recent empirical study of the linguistic devices that Supreme Court justices have used in federal jurisdiction cases, see Laura E. Little, Hiding with Words: Obfuscation, Avoidance, and Federal Jurisdiction Opinions, 46 UCLA L. REV. 75 (1998).
208. For examples of the views of advocates of judicial candor, see David L. Shapiro, In Defense of Judicial Candor, 100 HARV. L. REV. 731 (1987), and, in a tribute to United States Supreme Court Justice John Paul Stevens' candid approach, see Susan Estrich, The Justice of Candor, 74 TEX. L. REV. 1227 (1996). The difficulties of defining judicial candor are discussed by Scott C. Idleman, A Prudential Theory of Judicial Candor, 73 TEX. L. REV. 1307, 1316-21(1995). In that article Professor Idleman defines candor as "the full disclosure of relevant information, evaluated subjectively from the judge's point of view." Id. at 1321. Professor Idleman also analyzes the rationales supporting a goal of judicial candor, id. at 1334-76, and a series of factors that might cause the use of judicial candor to be imprudent. Id. at 1381-95. For a more recent empirical study of the linguistic devices that Supreme Court justices have used in federal jurisdiction cases, see Laura E. Little, Hiding with Words: Obfuscation, Avoidance, and Federal Jurisdiction Opinions, 46 UCLA L. REV. 75 (1998).
209. For examples of the views of advocates of judicial candor, see David L. Shapiro, In Defense of Judicial Candor, 100 HARV. L. REV. 731 (1987), and, in a tribute to United States Supreme Court Justice John Paul Stevens' candid approach, see Susan Estrich, The Justice of Candor, 74 TEX. L. REV. 1227 (1996). The difficulties of defining judicial candor are discussed by Scott C. Idleman, A Prudential Theory of Judicial Candor, 73 TEX. L. REV. 1307, 1316-21(1995). In that article Professor Idleman defines candor as "the full disclosure of relevant information, evaluated subjectively from the judge's point of view." Id. at 1321. Professor Idleman also analyzes the rationales supporting a goal of judicial candor, id. at 1334-76, and a series of factors that might cause the use of judicial candor to be imprudent. Id. at 1381-95. For a more recent empirical study of the linguistic devices that Supreme Court justices have used in federal jurisdiction cases, see Laura E. Little, Hiding with Words: Obfuscation, Avoidance, and Federal Jurisdiction Opinions, 46 UCLA L. REV. 75 (1998).
210. For a critique of the possibility that no legitimate limits may develop on the opportunities for dynamic statutory interpretation, see Nicholas S. Zeppos, Judicial Candor and Statutory Interpretation, 78 GEO. L.J. 353, 385-93 (1989).
211. Fidelity Fin. Servs, Inc. v. Fink, 522 U.S. 211, 118 S. Ct. 651 (1998).
212. Rivet v. Regions Bank of La., 522 U.S. 470, 118 S. Ct. 921 (1998)
213. Kawaauhau v. Geiger, 523 U.S. 57, 118 S. Ct. 974 (1998).
214. Cohen v. De La Cruz, 523 U.S. 213, 118 S. Ct. 1212 (1998).
215. 522 U.S. 470. 196 Id. at 472. 197 Id. at 478. 198 522 U.S. 211. 199 See 11 U.S.C. § 547(c)(3)(B) (1998).
216. See Mo. REV. STAT. § 301.600(2) (1994).
217. Fidelity, 522 U.S. at 221.
218. See id. at 221 (including "when," "cannot acquire" and "perfected").
219. Id. at 217-20
220. 118 S. Ct. 974.
221. 118 S. Ct. 1212.
222. Kawaauhau, 118 S. Ct. at 978.
223. Dr. Geiger's treatment of an infection following a foot injury was ineffective and resulted in the amputation of Ms. Kawaauhau's leg below her right knee. See id. at 976.
224. 11 U.S.C. § 523(a)(6) (1994).
225. Kawaauhua, 118 S. Ct. at 977. Subsequent decisions have struggled with the question of whether "malicious" is now subsumed by the Geiger Court's definition of "willful" or whether "malicious" creates an independent test. Compare Miller v. J.D. Adams, Inc. (In re Miller), 156 F.3d 598 (5th Cir. 1998), cert. denied. 119 S. Ct. 1249 (1999), with Dennis v. Novotny (In re Novotny), 226 B.R. 211 (Bankr. D. N.D. 1998).
226. Id. at 978.
227. Kawaauhua v. Geiger (In re Geiger), 172 B.R. 916 (Bankr. E.D. Mo. 1994), rev'd. 93 F.3d 443 (8th Cir. 1996), reh'g en banc, 113 F.3d 848 (8th Cir. 1997), aff'd, 523 U.S. 57, 118 S. Ct. 974 (1998).
228. Geiger v. Kawaauhau (In re Geiger), 113 F.3d 848, 860 (8th Cir. 1997) (Murphy, J. dissenting), aff'd, 523 U.S. 57, 118 S. Ct. 974 (1998).
229. In re Geiger, 172 B.R. at 923.
230. In re Geiger, 113 F.3d at 860.
231. In re Geiger, 172 B.R. at 917-19; In re Geiger, 113 F.3d at 854-55.
232. Kawaauhau, 118 S. Ct. at 976. The Eighth Circuit's majority stressed more of the expert's conclusions than the development of Ms. Kawaauhau's symptoms. See In re Geiger, 113 F.3d at 849-50.
233. In re Geiger, 113 F.3d at 857.
234. Cohen v. De La Cruz, 118 S. Ct. 1212 (1998).
235. De La Cruz v. Cohen (In re Cohen), 185 B.R. 180, 182-83 (Bankr. D. N.J. 1995), aff'd, 191 B.R. 599 (D. N.J. 1996), aff'd, 106 F.3d 52 (3d Cir. 1997), aff'd, 118 S. Ct. 1212.
236. Id. at 184.
237. De La Cruz v. Cohen (In re Cohen), 185 B.R. 171, 178-79 (Bankr. D. N.J. 1994).
238. In re Cohen, 185 B.R. 180, 189-90.
239. De La Cruz v. Cohen (In re Cohen), 191 B.R. 599, 609 (D. N.J. 1996), aff'g 185 B.R. 180 (Bankr. D. N.J. 1995), aff'd, 106 F.3d 52 (3d Cir. 1997), aff'd, 118 S. Ct. 1212 (1998).
240. Cohen v. De La Cruz (In re Cohen), 106 F. 3d 52, 59 (3d Cir. 1997), aff'd, 118 S. Ct. 1212 (1998).
241. Cohen v. De la Cruz, 118 S. Ct. 1212, 1219 (1998).
242. Id. at 1216.
243. Id. at 1217.
244. Id. at 1217-18.
245. Id. at 1218-19.
246. She also uses hypothetical scenarios that resulted in significant consequential damages following the fraudulent behavior as a way of indicating that the debtor's argument could produce outcomes that were even more inconsistent with congressional intent. See id. at 1218.
247. 231 Id.
248. 11 U.S.C. § 523(a)(2)(A) (1994).
249. Cohen v. De La Cruz (In re Cohen), 106 F.3d 52, 59 (3d Cir. 1997), aff'd, 118 S. Ct. 1212 (1998).
250. Id. at 60.
251. Palmer v. Levy (In re Levy), 951 F. 2d 196 (9th Cir. 1991), cert. denied, 504 U.S. 985 (1992).
252. St. Laurent v. Ambrose (In re St. Laurent), 991 F.2d 672, 677-81 (11th Cir. 1993).