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Levitin's Business Bankruptcy, 2d Edition

posted by Adam Levitin

I'm pleased to announce that the second edition of my casebook, Business Bankruptcy:  Financial Restructuring and Modern Commercial Markets, is now in print and available for purchase from quality establishments such as Amazon

If you haven't used the book, here's the pitch.  It's a financial restructuring book.  (The publisher insists on it being called "Business Bankruptcy" to align with existing course categories.)  My take is that bankruptcy—that is in-court restructuring—is only one part of the financial restructuring picture, and that one really can't understand bankruptcy law very well without understanding first what is and isn't possible in terms of liquidations and restructurings out-of-court.  If you don't know what can be done in terms of restructuring, say bond debt or syndicated loans outside of bankruptcy, it just won't be clear what bankruptcy brings to the table in terms of legal tools.  Thus, the first third of the book is about out-of-court restructuring.  I believe it's the only book around with that sort of coverage of out-of-court restructuring issues, but I strongly believe that students are well-served by this coverage, both intellectually and as preparation for practice, as bankruptcy lawyers don't just do Chapter 11 work. 

If you're looking to teach a combined 7/13/11 course, this isn't the book for you.  I've stopped teaching consumer bankruptcy and haven't written anything in the area for a while.  The reason is simple:  I just don't think there's anything especially exciting going on in that space.  Historically, consumer bankruptcy was an interesting area to teach and study because it was the window into the financial lives of consumers and the only place in the law school curriculum where consumer credit policy issues really reared their head.  This is what made the work of Sullivan, Warren & Westbrook so exciting and relevant. 

Today, consumer bankruptcy remains a valuable empirical window into the lives of a subset of financially distressed consumers, but it's not the place where consumer credit policy is happening.  We've moved from regulating consumer credit on the back-end, through the bankruptcy discharge, to regulating it on the front-end through the CFPB.  Accordingly, I've changed what I teach to being a stand-alone Consumer Finance course (more about that in the next post) and a financial restructuring class that focuses on business restructuring.  I've been really happy with this change because it lets me both go deeper into Chapter 11 than the combined 7/13/11 course and to go deeper into consumer credit policy issues than one can do if one has to teach the means test, the hanging paragraph, and discharge, etc.  To be sure, there is "one Code to rule them all," and there are some topics that might seem easier to teach in a consumer context than a business context (e.g., fraudulent transfers), but so many of the policy issues concerning consumers are just unrelated to those relating to business reorganization.  

If you're still with me at this point, here's what you can expect in the second edition.  The basic design of the book is the same--it's still built around problem sets at the end of each chapter (similar in that regard to Warren, Westbrook, Porter and Pottow), with the remainder being expository text, cases, and case studies that give the larger story behind particular litigation moments.  (I'm particularly proud of the Texas Rangers case study, not least because it's such a fabulous story.)  The most obvious difference from the first edition is that the second edition is substantially slimmed down. The new skinny look (well, it's still a big book at 1,008 pages including the table of contents, index, etc., but that's around a 10% reduction from the first edition) is primarily a function of cutting of superfluous cases (why have three when one will do?) and the excising of statutory materials from the text.  I realized that if you give students the statute in the text, they won't use their supplements, and supplements are really the way to go because their consecutive section number enables users to readily find the relevant statutory provision. 

The cuts themselves went far beyond 10% of the book, for while I was cutting on the one hand, I was also adding materials on the other.  Most importantly, there is now a much clearer thematic structure that emphasizes a set of limitations that exist on out-of-court liquidations and restructurings and shows how bankruptcy law addresses these limitations, sometimes successfully, sometimes less so.  To that end, I've added more materials on out-of-court restructurings and new summary chapters that provide an overview of the bankruptcy process and that compare the treatment of problems in out-of-court and in-court restructurings.  I've also added in more transactional materials, such as various covenants, to go with things like a RSA and bond indenture.  There are general improvements—typos corrected, problem sets updated, etc.  Lastly, the chapter ordering has been reshuffled.  The first edition had an idiosyncratic structure that shuffled avoidance actions off to the end of the book; this edition tracks a more traditional ordering of topics (although if you buy into my original thinking, it's still totally possible to teach the materials in that order).  The teacher's manual is also being updated (and will be ready for use in the spring semester). 

So, if you've bought into my vision of teaching business reorganization separately from consumer bankruptcy and for giving more than passing coverage to out-of-court restructuring, I'd urge you to try the book. 

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