Credit Slips

What Is The Effect of Having So Many Adjuncts Teaching Bankruptcy Law Courses?

Two surveys show that a high percentage of bankruptcy courses is taught by adjuncts rather than full time faculty. A 1997 survey by an ABA Committee looking soly at bankruptcy courses and completed by bankruptcy teachers showed that over half the 100 schools that replied made major use of lawyers or judges in teaching their bankruptcy courses, 20% made occasional use and 30 % made little or no use. In a 2007 survey which covered a dozen or so law school subject areas and completed by law school associate deans one third of the 75 reporting schools indicated that adjuncts taught one or more of the bankruptcy courses in the curriculum. (See Lander, Are Adjuncts a Benefit or a Detriment? 33 U. Dayton L. Rev. 285 (2008). The key question is whether this high use of adjuncts helps or hinders the teaching of bankruptcy law and whether it helps or hinders bankruptcy scholarship.

Call for Papers on Regulation of Financial Institutions

The Association of American Law Schools Section on Financial Institutions and Consumer Financial Services Program for the 2009 Annual Meeting (January in San Diego) has announced its topic: Does Modern Financial Institution Regulation Work? Reflections on Deregulation and Internationalization of Supervisory Standards. The program will consider these, and other, questions: 

• Did deregulation through the Gramm-Leach-Bliley Act save an anachronistic industry or did it create opportunities for abuse?
• Have our enormous investments in capital regulation and our increasing reliance on risk-based models paid off?
• Will structural reforms abroad, the subprime crisis, and the Treasury’s Blueprint serve as an impetus for the United States to address its complex and, arguably, inefficient agency structure?

Law teachers and other scholars are invited to submit manuscripts dealing with any aspect of the foregoing topic. Junior faculty members are particularly encouraged to submit manuscripts. A review committee will invite the author(s) of each selected paper to make a presentation at the program session. Please send manuscripts to the Program Chair, Heidi Mandanis Schooner, Catholic University, no later than August 1, 2008.

When Agencies Get it Wrong, They Reeeeeeeeeeeeeeeeeealy Get it Wrong

We ended the first day of the conference with management professors, Professor Gerry McNamara (Michigan State University) and Professor Paul M. Vaaler (University of Minnesota). They discussed How and Why Credit Assessors "Get It Wrong" when Judging the Risk of Borrowers: Past and Present Evidence at Home and Abroad. Professor Vaaler observed that the subprime meltdown is just one of the latest mistakes the rating agencies have made in recent times (he also points to the S&L crisis, Asian financial crisis). He argues, however, that private, credit rating agencies are at the center of the current housing crisis.

Professor Vaaler stressed that the agencies almost always get it right when assessing the risk posed by individual securities. But, when they get it wrong they get it wrong in a spectacular way.

The Heady Conversation

After the lunch at the Debt conference on Friday, Professor Brian Knutson, a professor of Psychology & Neuroscience at Stanford, presented a paper on Brain, Decision, and Debt. The field of neuroeconomics (which has been around for about a decade) examines how the brain reacts when a person makes a decision, and how the brain causes individuals to make decisions. His research attempts to link the brain to debt – which he characterizes as a risk problem – and to show how people get into debt.

Maxed Out

The luncheon speaker for the conference was James. D. Scurlock, the director and producer of Maxed Out, which airs this month on Showtime. For those of you who haven’t seen the documentary, it’s a scathing, eye-opening depiction of how the financial services industry (most notably, credit card issuers, debt collection agencies) treats ordinary, hardworking Americans and how people are seduced into debt. He expressed his gratitude to the sponsors for inviting him to a conference where he was sure his talk wouldn’t be the most depressing.

Streaming Academics

I hope our readers will excuse a little promotional material, but I have received several inquiries about our upcoming conference, "A Debtor World: Interdisciplinary Academic Symposium on Debt." Shockingly, Champaign, Illinois, is not a major travel destination for many of you, and readers have written me to ask about the conference proceedings.

If you are unable to join us here in Champaign, the conference sponsors (the University of Illinois and the American Bankruptcy Institute) have made available a live webstream for the conference. To view the live webstream, you would need to pay the same registration as the in-person attendees ($195 for ABI members, $395 for nonmembers). More information about the live webstream can be found here.

The papers presented at the conference will be collected for publication in an edited volume by an academic press. When that volume becomes available, I will make an announcement here on Credit Slips. We now return you to regular programming.

Illinois Academic Fellowships

The University of Illinois College of Law has just announced a program where persons looking to enter the legal academy can spend one or two years in residence. The program's goal is to help prepare persons for tenure-track positions at leading law schools.

Given our blog's focus on credit and bankruptcy matters, I was somewhat reticent to make that announcement here, but I have heard from Credit Slips readers who are aspiring legal academics. Rather than make an elaborate post, I'll just direct interested persons to the web page describing the program. The Illinois Academic Fellows program is not at all subject-matter specific, but Credit Slips readers might have a particular interest because of our law school's Program in Business Law and Policy, which would offer numerous events and opportunities for interaction with senior scholars in business and commercial law. If any of our readers have an interest in this program and have any questions, please feel welcome to contact me.

Online International Bankruptcy Course

My friend, Professor David Epstein at Southern Methodist University, was telling me about an innovative course in International Bankruptcy. The course is offered at NYU, but through distance learning technology, law students at other schools can participate. I asked David if he would write up a few paragraphs about his experience with the course that I could share with Credit Slips readers. Here is what David wrote back.

I have often thought that students who are considering a transaction practice would benefit from a course in International Bankruptcy. The problem always has been that very few law schools have faculty members (or adjuncts) willing and/or prepared to teach such a course. I have been working with the American College of Bankruptcy (ACB) to address this need.

Call for Papers "Real Estate Transactions in Troubled Times"

The American Association of Law Schools is having its 2009 Annual Meeting in January in San Diego. The section on Creditors' and Debtors' Rights and the section on Real Estate Transactions are planning a three-hour extended program on Real Estate Transactions in Troubled Times. The speakers will be selected by a submission of papers, which are due April 10, 2008, and can include early works in progress. Practitioners are eligible to submit papers for consideration, as are adjunct professors or professors in other fields (although the bulk of presenters will be law professors). The entire call for papers is after the jump.

A Debtor's World: An Interdisciplinary Academic Conference

On May 2-3, the University of Illinois College of Law and the American Bankruptcy Institute are sponsoring "A Debtor's World: An Interdisciplinary Academic on Debt." Our goals is to bring together leading scholars from different disciplines to have a conversation about how our society should use and think about debt. Confirmed speakers include Terry Halliday (American Bar Foundation), Heidi Hurd (Illinois, Philosophy and Law), Brian Knutson (Stanford, Neuroscience), Stephen Lea (Exeter, Psychology), Gerry McNamara (Michigan State, Management), Craig Muldrew (Queens College of Cambridge, History), George Ritzer (Maryland, Sociology), Amir Sufi (Chicago, Business), Teresa Sullivan (Michigan, Sociology), Paul Vaaler (Minnesota, Management), Elizabeth Warren (Harvard, Law), and Rich Wiener (Nebraska, Psychology). The keynote speaker is James Scurlock, the producer of the documentary Maxed Out. More information, including a link to the registration materials is here.

Unmerchantable McDonalds' Fries? New Commercial Law Blog

Several law professors have started a new blog, Commercial Law, to offer their thoughts on issues arising under the Uniform Commercial Code or commercial laws. The blog is off to a lively start with daily postings on all sorts of topics, including the status of Revised Article 1 of the UCC, contracts of adhesion, and the future of teaching commercial law.

The post that caught my eye was Jennifer Martin's post on a trio of cases alleging that McDonald's products violate UCC sales provisions, including the warranty of merchantability. While all three cases failed (and I'm in agreement with Prof. Martin about the correctness of those rulings), it's fun to think about how the UCC applies to so many ordinary transactions and to question how these doctrines hold up to shifting societal norms. For contracts or consumer law teachers, the cases provide fun hypothethicals for class, and for all of us who struggle to explain their legal specialty to friends and families, the cases offer an everyday, if somewhat silly, example of commercial disputes.

Commercial Law at DePaul

On May 1, DePaul University College of Law and the Commercial Law League of America are sponsoring a symposium entitled "Lawyers, Law Firms & the Legal Profession: An Ethical View of the Business of Law." The program appears aimed principally at practicing lawyers with topics such as whether the billable hour must die (echoing Scott Turow's recent claim in the ABA Journal), lawyer mobility, and the state of ethics in the legal profession. The event will take place at the Westin Hotel on Michigan Avenue in Chicago, Illinois. More information and how to register can be found here.

Call for Banking and Consumer Financial Services Papers

The University of Connecticut School of Law is hosting a Junior Scholar Workshop on Banking and Cosnumer Financial Services Law on May 28-29th. Consumer Financial Services is certainly a hot area of policymaking right now, and this academic conference promises to be exciting and timely.

Papers may be submitted by any law faculty with less than eight years of teaching, and may be on topics, including, but not limited to:

• State and federal supervision and regulation of bank safety and soundness
• Consumer financial services and the regulation of those services
• Payment systems and other topics of commercial law relating to consumer banking
• Legal implications of bank-based systems of finance; and
• International banking principles, supervision and regulation

Submissions are due Friday February 29th and may either be in the form of a full paper or a precis of 800-1200 words. To submit a paper or for more information, contact Prof. Patricia McCoy at the University of Connecticut School of Law.

Update on Summer Reading

The summer reading "contest" has attracted several entries; I'll be summarizing them in another week, so last call to contribute a book or article on a corporate or consumer credit topic in the next few days. Please make your suggestion as a comment to this post and I'll aggregate everything. The best part of this blog is the great ideas that our readers give to us, so I hope you'll share a new or favorite reading, whether a novel, article, news story, or book.

John Pottow offers the following list of three suggestions, which I've put below. I've already mailed him his prize of Garfield stickers for the being an overachiever and sending in three entries.

1) Jim Hawkins, who previously co-authored a piece with Ronald Mann on payday lenders, has a great working paper on the rent-to-own industry that explores the dynamics of that industry and reports on interesting interviews that he conducted with executives.

2) Lynn LoPucki and JJ White are having a great back-and-forth in a volume of the Michigan Law Review that is forthcoming this year on Lynn's paper co-authored with Joseph Doherty on "fire sales" that suggests that outcomes from sales under section 363 of the Bankruptcy Code are much lower (based on measures such as return on pre-bankruptcy assets) than traditional reorganizations. JJ's response, in part, is that Lynn suffers a selection bias pertaining to certain telecom firms as well as a measurement problem in what he includes in his valuation measures (and with his adjustments, finds that Lynn's effects may point the other way!)

3)   "You Asked For It, You Got It . . . Toy Yoda: Practical Jokes, Prizes, and Contract Law" by Keith Rowley, 3 Nev. L. Rev. 526. (2003) (Speaks for itself--great title). 

Summer Reading "Contest"

Remember the summer reading programs of your childhood, where you could keep track of your books, maybe prepare a few short reports on why you liked the books, and be entered in a drawing to win a grand prize--a new bike, a gift certificate at McDonalds, etc? Out of the same sense of nostalgia that brought back My Little Pony and Transformers, summer reading programs for adults are flourishing at libraries everywhere. Credit Slips is going to get into the action, in our own small way.

Leave a comment describing the most interesting or provocative book or article that you read this summer. The book/article must be bankruptcy or credit-related or plausibly related to the issues that we discuss on Credit Slips (no Harry Potter, please, unless you can explain how Harry Potter shed light on your understanding of debtor-creditor law). Please give the title, author, a short description, and if available, an online link.

What's the prize? . . . . Hmmm . . . the joy of sharing your love of learning. Isn't that really what motivated you back in elementary school; you didn't actually want those Strawberry Shortcake stickers, did you?  In two weeks, I'll put together a summary of the most popular or interesting nominations, along with the name of the nominating reader.

Living with the New Bankruptcy Law Conference

The Debtor-Creditor section of the American Association of Law Schools is having a special meeting in conjunction with the National Conference of Bankruptcy Judges'  Annual Meeting in Orlando. The NCBJ will meet October 10-12 and the Debtor-Creditor section will meet October 12-13. Registrants who sign up for the AALS Debtor-Creditor program, entitled Living with the New Bankruptcy Law, are admitted to the entire NCBJ program. The fee is very reasonable, thanks to efforts by the NCBJ to reach out to the academic community.

What's on the program? It kicks off with a discussion led by six judges on collaborative curricular and extracurricular programs that can improve law students' knowledge of bankruptcy law and practice.  The next day, Eric Brunstad will give a keynote presentation of how federal courts do and should rule on bankruptcy issues. The plenary program that follows is entitled Perspectives on the Impact of the 2005 Act, at which I plan to present the first data from the new 2007 Consumer Bankruptcy Project Phase IV. Jonathan Lipson and William Widen are also making presentations at that panel, and Judge Wedoff will offer comments. The event winds up with concurrent sessions and an off-site dinner. All this is on top of the preceding days of NCBJ Annual Meeting presentations.

Maxed Out in Class

Many Credit Slips readers will be familiar with James Scurlock's documentary, Maxed Out. If you're not familiar with it, you should be. It's a look at the consumer credit industry and is especially effective in conveying what happens to the individuals who are the victims of aggressive lending practices. You can get it  on DVD. (We really need to get one of those Amazon.com click-through agreements so we can get our 5 cents when somebody clicks through to buy it.) If you're a Netflix customer, you can watch it as part of their "Watch It Now" service (or do it the old-fashioned way and order the DVD).

As I'm putting together my syllabus for my Bankruptcy class this fall, I was considering whether to have a screening of the movie for the first day of class or otherwise requiring the students to see it. In the law school classroom, we'll spend a lot of time on the rules, but it is easy to forget that these rules have real consequences for real people. The movie would provide powerful context to the stories we will see in our casebook. We'll talk, for example, about the anti-modification provisions of chapter 13, a seemingly bland topic that really can be about whether someone keeps their house.

On the other hand, this particular movie has a strong point of view. Although it is a point of view with which I am in general agreement, not everyone shares it. On balance, I'm inclined not to require viewing the movie as part of the class but perhaps to have an optional screening for interested students. (And, if you happen to be one of my students, it won't be on the final exam.) What do others think? Does this movie have place in the classroom, law school or otherwise?

Fed Conference on Consumer Credit

The Federal Reserve Bank of Philadelphia has just announced the six research papers that will be the focus of its upcoming Recent Developments in Consumer Credit and Payments conference. The papers are all written by economists and touch on a variety of bankruptcy or consumer credit topics that may interest Credit Slips readers.  I’ve given the titles and brief descriptions of the papers below:

• The Age of Reason: Financial Decisions Over the Lifecycle (finding that middle-aged adults borrow at less cost compared to younger and older adults across ten financial market and that some of the measured effects cannot be explained by observed risk characteristics and may result from age effects)
• Who Makes Credit Card Mistakes? (reporting that lower wealth individuals make more credit card mistakes of all types)
• Bankruptcy: Is It Enough To Forgive or Must We Also Forget? (developing model suggesting that optimal law would forbid lenders from fully utilizing past information about bankruptcy)

Moves & New Hires in the Legal Academy

I did not get many e-mails in response to my request for information about moves in the legal academy in the areas of bankruptcy law, commercial law, or consumer law. You will excuse me, therefore, if this list is woefully incomplete. Also, I've done my best to make sure the information is accurate, but it can be difficult to find all of the information. Please e-mail me (rlawless-at-law-dot-uiuc-dot-edu) with corrections or updates, and I'll add them to the list:

LATERAL MOVES

• Rich Hynes, from William & Mary College of Law to the University of Virginia
• Jason Kilborn, from Louisiana State by way of a visting professorship at the University of North Dakota to John Marshall Law School in Chicago (and a former Credit Slips guest blogger)
• Ronald Mann, from the University of Texas to Columbia Law School (and a former Credit Slips guest blogger)
• Bruce Price, from the University of Denver to the University of San Francisco
• Bob Rasmussen, from Vanderbilt University to become dean of the University of Southern California School of Law
• Nancy Rapoport, formerly the dean at the University of Houston Law Center and now a limited professor of law at the University of Nevada, Las Vegas -- that is the Gordon & Silver, Ltd., Professor of Law (my former professorship -- I was once a limited professor also)
• Bernie Trujillo, from the University of Wisconsin to Valparaiso

NEW HIRES

• Kelli Alces, starting at Florida State after a visiting assistant professorship at Richmond
• Adam Levitin, starting at Georgetown

VISITS

• Ted Janger, at Brooklyn Law School and visiting at Harvard Law School in spring 2008 (and a former Credit Slips guest blogger)
• Lynn LoPucki, at UCLA and visiting at Washington University Law School in Fall 2007 and visiting at Harvard Law School in Spring 2008
• Chris Peterson, at Florida and visiting at the University of Utah for the 2007-2008 academic year
• Keith Rowley, at UNLV and visiting as the Charles E. Tweedy, Jr., Visiting Chairholder in Law at the University of Alabama for the 2007-2008 academic year
• Ed Morrison at Columbia University and visiting at the University of Chicago in the 2008 spring quarter

As I wrote above, let me know about any corrections or additions to this list. It would be especially great to hear about more new hires in these subject matters. Again, comments are closed, so please use e-mail.

UPDATED ON 7/2/07

2007 Moves in the Academy

When we started this blog, we did not want it to become an "inside baseball" discussion of what is happening in the law school academy. We seem to have a broad audience, a fact of which I am quite proud. Still, it seems we can maybe withstand one small piece of law school news.

I see most of the other subject-matter specialties producing lists of faculty moves and visits for the 2007-2008 academic year. Why should they have all the fun? Please e-mail me (rlawless-at-law-dot-uiuc-dot-edu) the names of persons who work in bankruptcy law, commercial law, or consumer law and who are moving schools, starting at schools, or have year-long visits. I'll collect and post the results. (The comments are closed. Please send me an e-mail.)

Self-Citing

If you will indulge me, I will engage in a little self-promotion this morning. The most recent issue of the American Bankruptcy Law Journal (p. 523, vol. 80) has an article that I co-write with Ira David entitled "The General Role Played by Specialty Journals: Empirical Evidence from the Bankruptcy Scholarship." Here is a summary of the findings from the article:

Our data confirm much of what scholars have long suspected. All things being equal, to get cited in the law reviews one should publish in general law reviews and join the faculty of a highly ranked school. Highly ranked general law reviews get cited more than lower ranked general law reviews. In turn, general law reviews as a group get cited more frequently than specialty journals as a group. Legal academics get cited more than nonacademics. Academics at highly ranked schools get cited more than academics at lower ranked schools.

When it comes to citations in the case law, the situation is dramatically different. Academics are not generally favored, but academic reputation is favored. More interestingly, not only do specialty journals outperform general law reviews overall, but lower-ranked general law reviews outperform law reviews from more highly ranked law schools. Older articles have more citations in the case law than do newer articles, whereas the converse is true for citations in the law reviews.

The article supports the conjecture that general law reviews have moved away from articles that the bench and bar will find useful. As we write, "General law reviews specialize in the academy just as specialty journals could be seen as specializing in the bench and bar." Although we limited our research to bankruptcy specialty journals and although there always will be specific exceptions to generalized empirical findings, the work may have broader relevance beyond the bankruptcy field.

We never posted the article to the Social Science Research Network or SSRN so this should be new to everyone. There are responses from Judge Thomas L. Ambro, a judge on the United States Court of Appeals for the Third Circuit and Blake Rohrbacher, an attorney at Richards, Layton & Finger. Both discuss the relative lack of interest in judicial citations of law review articles.