Chapter 11 in Transition - From boom to bust and into the future

American Bankruptcy Law Journal

Volumn 81, Issue 4, 2007, Pages 375-404

  Miller, Harvey R ^a  

^a Weil Gotshal and Manges LLP ^*

Author keywords

[No Author keywords available]

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EID: 39049096878     PISSN: 00279048     EISSN: None     Source Type: Journal    
DOI: None     Document Type: Article

References (71)

1. HENRY DUNNING MACLEOD, 31 THE PRINCIPLES OF ECONOMIC PHILOSOPHY 481 (2nd ed., Longmans, Green, Reader, and Dyer 1872).
2. Jules Stewart, Borrowing From Peter, Paying Paul, Apr. 26, 2007, http://www.whatpc.co.uk/financial-director/analysis/2188474/iowewho.
3. www.dailyii.com (4/25/07).
4. Financial Times (5/17/07).
5. www.bloomberg.com (5/9/07).
6. The era of covenant-lite loans appears to have ended with the increased exposures resulting from the sub-prime lending crisis.
7. Harris Rubinroit, KKR Seeks Record $16 Billion in Covenant-Lite Loans, BLOOMBERG.COM, May 30, 2007, http://www.bloomberg.com/apps/ news?pid=newsarchive&sid=aqJeKu.guvno.
8. Earnings before interest, taxes, depreciation and amortisation.
9. GATA (5/2/07).
10. Investment Dealers' Digest (1/8/07).
11. Harris Rubinroit, Leveraged Loans Attract Buyers of High Risk Debt, INT'L HEARLD TRIB., Dec. 28, 2006, at 15.
12. Caroline Salas, Junk Bonds May Repeat Crash of 2002 on LBO Credits, BLOOMBERG.COM, May 15, 2007, http://www.bloomberg.com/ apps/news?pid=20670001&refer=&sid=awcwd3rXy.c.
13. Anuj Bahal et al. Another Quarter in the Booths, Another Record for U.S. Private Equity, TRENDWATCH, May 2007, at 2, available at http:www.fticonsulting.com/web/resources/list.aspx?label=ARTICLE.
14. www.bloomberg.com (5/30/07).
15. Ian Dey, 'Carlyle Plans To List $1Bn Fund, Feb. 24, 2007, http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/02/25/cncarl25.xml.
16. Id.
17. Tiffany Kary, Experts Say 'Liquidity Bubble' Could Burst in 2007, DAILY BANKRUPTCY REVIEW, Jan. 2, 2007, at 9.
18. Douglas Baird, The End of Bankruptcy, 55 STAN. L. REV. 751, 753 (2002).
19. Press Release, Federal Judiciary, Bankruptcy Filings Plunge in Calendar Year 2006 (Apr. 16, 2007), available at http://www.uscourts.gov/ Press_Releases/bankruptcyfilings041607print.html.
20. Id.
21. According to The Bankruptcy Yearbook & Almanac - New Generation Research
22. See 2004 BANKRUPTCY YEARBOOK & ALMANAC 5 (Christopher M. McHugh & Thomas A. Sawyer eds., 2004).
23. Exceptions that always prove the rule, particularly in cases involving sick old-line, asset-based industries or business entities beset by mass tort litigation or organized labor issues, and pension and employee benefits liabilities.
24. Creditreform Economic Research Unit, Insolvencies in Europe 2006-07, at 26, available at http://www.creditreform.de/English/ Creditreform/News/Index.jsp.
25. Id.
26. This concept had not previously been nationally accepted and thrived only in particular, or one might say peculiar, areas such as the Southern District of New York. Across the Hudson and East Rivers, chapter 11 receivers were mandatory. Under the DIP concept, the management of the debtor is vested with the powers of a trustee responsible for the prosecution of the reorganization case.
27. Special interest groups adopted the arguments made in support of § 1110, that the risk of bank-ruptcy was too high to support doing business with particular entitles and if Congress wanted such business to be conducted, it needed to protect those special interest groups from the risk of bankruptcy.
28. See Harvey R. Miller et al., Debtor Dispossessed: The Rise of the "Creditor-in-Possession" and Chapter 11 Asset Sales - Does Chapter 11 Have a Future for Debtors 13 (unpublished manuscript, on file with the authors).
29. hedgefund.net (5/10/07); theticker.com (5/23/07); www.theticker.org (5/23/07). Other estimates put the number lower at $1.4 trillion.
30. As much as hedge funds have grown recently, the number of assets under management by hedge funds remains at only 10% of mutual fund assets, www.theticker.org (5/23/07).
31. David Leonhardt, Worth a Lot, But Are They Worth It?, N.Y. TIMES, May 23, 2007, at C1.
32. Hedge Fund Daily, Bankers Lose Lending Dominance To Hedge Funds, Others, Apr. 25, 2007, http://www.iinstitutionalinvestor.com/article.aspx? articleID=1329678.
33. Id.
34. Id.
35. theticker.com (5/23/07)
36. Leonhardt, supra note 31.
37. Reuters (5/23/07).
38. Leonhardt, supra note 31.
39. Id.
40. Gregory Zuckerman, John Henry In a Slump: Merrill Lynch Joins the Parade Out of Red Sox's Owner's Firm, Hard Times for Trend Followers, WALL ST. J., May, 29, 2007, at C1.
41. Id.
42. Id.
43. Andrew Ross Sorkin, To Battle, Armed with Shares, N.Y. TIMES, Jan. 4, 2006, at C1.
44. Mark Landler, U.S. Balks at German Chancellor's Call for Global Regulations To Curb Hedge Funds, N.Y. TIMES, Jun. 17, 2005, at C6.
45. Alistair Barr, Hedge Fund Supply Suggests Parallels with LTCM Crisis, MARKETWATCH, May 2, 2007, http://www.marketwatch. com/news/story/hedge-fund-risk-measure-suggests/story.aspx?guid= %7B867DOA45-88AE-42A8-A49C-DED935AC301F%7D.
46. cnnmoney.com (5/2/07).
47. Serena Ng, Enough Already, WALL ST. J., May 20, 2007, at B3.
48. Hedge Fund Daily, Hedge Fund Drive To Succeed Fuels Turnaround Industry, May, 8, 2007, http://www.institutionalinvestor.com/article.aspx? articleID=1341144.
49. The Vultures Take Wing, ECONOMIST, Mar. 29, 2007.
50. Id.
51. See generally Douglas Baird & Donald Bernstein, Absolute Priority, Valuation Uncertainty, and the Reorganization Bargain, 115 YALE L.J. 1930 (2006).
52. Donald S. Bernstein, U.S. Chapter 11 Today: A Funny Thing Happened On the Way to the Court-house, in The International Comparative Legal Guide to: Corporate Recovery & Insolvency 2007 5-9 (Global Legal Group Ltd. 2007) available at http://www.iclg.co.uk/khadmin/Publications/pdf/1215.pdf.
53. ROGER LOWENSTEIN, ORIGINS OF THE CRASH: THE GREAT BUBBLE AND ITS UNDOING, 217 (2004).
54. Kabir Chibber Se John Glover, Looming Crash Prompts Jump in Distressed Debt Hiring, BLOOM-BERG.COM, May 30, 2007, http://www.bloomberg. com/apps/news?pid=20601109&sid=aDeiV7bM7qpc&refer=home.
55. Christian Baumgaertel & Christine Harper, UBS Has Loss, To Cut Jobs, After Subprime Writedown, BLOOMBERG.COM, Oct. 2, 2007, http://www.bloomberg.com/apps/news/pid=20601087&sid=amzHxK6lzNU&refer= home.
56. Id.
57. Floyd Norris, Wait a Few Months Before Tour Believe the Humbert, N.Y. TIMES, May 26, 2007. at C3.
58. Salas, supra note 12.
59. Id.
60. Chibber & Glover, supra note 55.
61. Reuters, Fed Chief Backs Current Hedge Fund Rules, N.Y. TIMES, Apr. 12, 2007, at C3.
62. Merril Lynch (December 2006)
63. Id.
64. Global Growth To Continue in '07 Despite U.S. Slowdown, IMF Says, INT'L HERALD TRIB., Apr. 12, 2007, at 9.
65. Id.
66. Id.
67. Id.
68. Id.
69. International Tribune (1/14/07).
70. Transcript of remarks by Timothy F. Geithner at the Council on Foreign Relations' C. Peter Mc-Colough Roundtable Series on Int'l Economics, Jan. 11, 2007 available at http://www.newyorkfed.org/newsevents/speeches/2007/ gei070111.html (emphasis added).
71. Michael Panzner, Instability in Global Financial Markets May Trigger Repricing of Assets, Jan. 30, 2007, http://seekingalpha.com/article/25527- instability-in-global-financial-markets-may-trigger-repricing-of-assets.