17 posts from December 2018

Congolese Elections and the Opportunity for the International Community to do the Right Thing

posted by Mitu Gulati

The Congo held elections yesterday; elections that the ruling party has kept finding excuses to postpone over the past two years.  International pressure though, forced them to be held (albeit in an incomplete fashion).  Now, the question is whether the vote counts will be done with some modicum or propriety and whether the current kleptocrats will nevertheless find some way to hold on to power in this resource rich nation with a tragic history.  The latest reports are telling us that there is already chaos and that the internet has been shut down (from the Washington Post, see here).

My interest in the Congo was spurred by a question about its sovereign debt (of course). My Duke colleague and frequent co author, Joseph Blocher, who has worked in Africa and knows my obsession with sovereign debt–and particularly the question of what is to be done about the sovereign debts incurred by despotic leaders (the “Odious Debts” problem)--got me hooked on the history of the Congo some years ago by telling me the story of the debt of the Congo Free State from the late 1800s. The debt was incurred by, and proceeds subsequently stolen by, one of the worst despots in history–King Leopold of Belgium.  He issued bonds in the millions of francs in the name of the Congo Free State and then, in 1908, when the international community forced him out because of the genocide he had engineered, the debts he had incurred in the name of his vassal state were put by the international community on to the backs of the Congolese people. When it comes to the Congo, the rest of the world has so much to be ashamed about (there is a super episode from the BBC’s The Foreign Desk here). But maybe we will do the right thing this time?

Drawing from work that Joseph and I have been doing on the Congo and the infamous 1908 forced transfer of sovereignty (here), here are some thoughts on the parallels between the events of today and of a century ago.

The scene in the Congo today is, sadly, is familiar. An unaccountable leader treats Congo as personal property, enriching himself as untold millions of Congolese labor to extract resources needed for the world’s latest technological boom. What will the international community do?

Today, the despot holding power is Joseph Kabila, the resource is coltan (used in cell phones), and the international response remains uncertain. Kabila has agreed to hold elections and step down, but he and his henchmen seem to keep finding excuses to postpone the transfer of power. 

In 1908, the leader was King Leopold, the resource was rubber (made valuable by the development of vulcanization), and the international response was extraordinary: On November 15, 1908, in response to intense pressure, Belgium bought the Congo Free State from its own king.

Today, as the world is understandably focused on the present and the future of the Congo, we should not forget the lessons of its past.

Continue reading "Congolese Elections and the Opportunity for the International Community to do the Right Thing" »

International & Comparative Insolvency Law Symposium CFP

posted by Jason Kilborn

If you're wondering what to do with your New Year's downtime, you might consider submitting a paper proposal for an International & Comparative Insolvency Law Symposium, this year to be held at the beautiful University of Miami (in Coral Gables) on November 14-15, 2019. The hosts are Drew Dawson (Miami), Laura Napoli Coordes (Arizona State), Adrian Walters (Chicago-Kent) and Christoph Henkel (Mississippi College). This is the second (annual?) such event, and if last year's symposium is any indication, it should be great. Proposal submissions are due January 31, 2019. See you there? 

A Contract Lawyer's X-mas Greeting

posted by Mitu Gulati

This arrived this morning from a dear friend, who knows what makes me laugh.  I hope it makes you chuckle, if not laugh out loud, as it did me:

Dear Mitu (a term deemed to include your assigns, heirs and successors),

We (including our officers, directors, agents and employees) send (for the avoidance of doubt, "send" shall mean authorize, execute and deliver) our warmest (measured on the Fahrenheit scale) best (understood to mean the wishes we extend on an unsecured basis to our most creditworthy correspondents) wishes (with no warranty of any kind, express or implied, as to outcome) to you and your family (including those to the second degree of consanguinity) for a Merry Christmas (without limiting the generality of the foregoing, this extension of best wishes shall be understood to include, on a pari passu basis, a Happy Christmas).

Contractual Lunacies

posted by Mitu Gulati

My friend, Glenn West, who knows my obsession with boilerplate contract terms whose meaning the parties themselves don’t seem to know, sent me a lovely present today:  A link to an article in the ABA Journal by legal writing guru Bryan Garner on “Trying to Decipher Provisions that Literally Make No Sense”.  I realize that my sense of humor is warped, but I was laughing out loud at reading this.

Here is my favorite bit:

The lunacies [of contract drafting] involve using pastiche forms riddled with wildly inconsistent ways of expressing simple duties, absurd archaisms whose purpose few lawyers can explain, and repellent typographic practices that still today make many if not most contracts grotesque to read.

What I’d like to explore in this column is the curiosity of “busts”—the prevalence of contractual provisions, sometimes perpetuated in deal after deal, that make no literal sense at all. That they exist at all is something of a marvel. After all, you’d think that transactional lawyers would adopt a protocol of reading and rereading each contract that goes out the door. Given that critical thinking and close reading are prized habits for lawyers, contradictory or outright nonsensical provisions should be exceedingly rare. Alas, they’re not.

Most experienced lawyers can recall anecdotes of contractual monstrosities. One involves a malpractice claim against a law firm: A mortgage had somehow been prepared in the early 1980s with a crucial line dropped. The sentence made no sense. The firm had prepared dozens if not hundreds of mortgages with the same language missing, resulting in an incomplete sentence that made little sense—and the sense it did seem to make resulted in a disposition that no sane drafter could have wanted. It seems that a typist had simply skipped a line and continued typing. Nobody caught the error—until a problem erupted in the early 2000s.

By that time, the faulty contract had long since become entrenched as the “firm form.” A secretarial error from a generation before had become permanently ensconced in the form.

Continue reading "Contractual Lunacies" »

Aurelius v. Puerto Rican Control Board (and "What Possibly Could be the Logic Behind Puerto Rico Being in the First Circuit?")

posted by Mitu Gulati

Last Monday, December 3, the First Circuit heard an oral argument that I have been looking forward to for ages.  The case involves an infamously aggressive hedge fund making an audacious challenge to the constitutionality of the Puerto Rican Control Board—an argument that is framed (hilariously, I think) as rescuing the Puerto Rican people from tyranny.  The events that followed did not disappoint in terms of drama. 

Though complex to answer, question in the case is easily put: Did the process by which the Puerto Rican Control Board was put in place violate the Appointments Clause of the US constitution? 

The lawyering was superb, which was not surprising, given that two legendary former SGs, Ted Olson and Don Verrilli, were at the lectern. But the First Circuit judges were ready and raring to go, and it barely took a minute before they launched into tough questions.  Judge Juan Torruella was especially on target; he knows the intricacies of the history and case law relating to Puerto Rico’s status better than almost anyone else and it was a treat to listen to his exchanges with the superstar lawyers.  (There were other lawyers making arguments as well, but the First Circuit panel was primarily interested in the Olson-Verrilli positions.)The audio file is available here, and is well worth a listen.

Continue reading "Aurelius v. Puerto Rican Control Board (and "What Possibly Could be the Logic Behind Puerto Rico Being in the First Circuit?")" »

Venezuelan Bonds: The Game is Afoot

posted by Mitu Gulati

Venezuela began defaulting on its bonds about fifteen months ago and is now in default on almost all of its outstanding bonds (except one that is backed by collateral).  The creditors, for these many months, have shown remarkable forbearance in refraining from accelerating the bonds and seeking judgments. 

The restraint on the part of the creditors for these past many months, I suspect, was not out of any especially benevolent feelings the creditors have towards the Venezuelan government.  Part of the explanation has to do with the different interest rates that applies to unpaid claims if one has an ordinary unpaid claim versus one that has been converted into a judgment (the latter is significantly lower).  On the flip side, the legal protections that apply to a judgment are much stronger (no need to worry about CACs or Exit Consents, and one can grab assets before anyone who has refrained from judgement).  Plus, the reality of most sovereign debt restructurings is that unpaid claims on interest usually don’t get paid out to anyone anyway (since the sovereign can’t even pay the base claims).  For those who want to know more about this, Mark and I talked about these matters here and here, when we were teaching our class on the Venezuelan sovereign debt some months ago.

Once one set of creditors accelerates though, then that puts everyone else who has not done so at a disadvantage because these first guys have an advantage in the litigation/attachment game.  And before today, only a few arbitration claim holders and one Promissory Note had begun the litigation game.  This had been causing anxiety among the bondholders I’ve been chatting with, but they had not made the move to coordinate into blocks of sufficient size to demand acceleration (most of the bonds have a requirement for acceleration of 25% of the holders in principal amount).

Today’s news from Reuters is big though. A group of hedge funds has put together the necessary number of bonds in the Venezuelan bond due 2034.  This is a rather special bond, if memory serves, because an attempt by the sovereign to force a restructuring can be blocked by 15% of the holders (in principal amount) rather than the typical requirement of 25%.  Bottom line: this bond is more litigation friendly.

Continue reading "Venezuelan Bonds: The Game is Afoot" »

Almost Citizens -- by Sam Erman

posted by Mitu Gulati

For those of you, who like me have been following the Puerto Rican debt drama, this wonderful new book by Sam Erman of USC might be of interest.  There are many wonderful and insightful stories in this book that I was altogether unaware of, despite having spent a lot of time reading about Puerto Rico's bizarre constitutional status.  Ultimately though, the most intriguing and insightful aspect of the book, to me, was the connection that Sam draws between the strange "foreign in a domestic sense" status of Puerto Rico and the events surrounding Reconstruction from the same period of time.

Sam was supposed to come to Duke last year to present this to the seminar that I run on Race, Law & Politics with Guy Charles, but we got hit by a snow storm on the day of his talk.  My initial thought had been to cancel the discussion and move on to the next paper.  But the students in the seminar (and Guy) had liked the draft of the book so much that they asked whether we might have a session to discuss it despite the fact that Sam was not going to be able to make it to Durham any longer.  We ended up having a fun discussion with my two wonderful con law colleagues, Walter Dellinger and Joseph Blocher. Indeed, that was perhaps our best session of the term (notwithstanding my general distaste for con law discussions). 

Next week, I hope to -- after talking to Walter and Joseph more -- do a little post on the recent oral argument in the first circuit about the constitutionality of the Puerto Rican Control Board.  That case, if it comes out the way I think it might, could turn the apple cart upside down.  But I need to listen to that oral argument tape again.

Here is the official book blurb for Sam's book:

"Almost Citizens lays out the tragic story of how the United States denied Puerto Ricans full citizenship following annexation of the island in 1898. As America became an overseas empire, a handful of remarkable Puerto Ricans debated with U.S. legislators, presidents, judges, and others over who was a citizen and what citizenship meant. This struggle caused a fundamental shift in constitutional jurisprudence: away from the post-Civil War regime of citizenship, rights, and statehood and toward doctrines that accommodated racist imperial governance. Erman’s gripping account shows how, in the wake of the Spanish–American War, administrators, lawmakers, and presidents, together with judges, deployed creativity and ambiguity to transform constitutional law and interpretation over a quarter century of debate and litigation. The result is a history in which the United States and Latin America, Reconstruction and empire, and law and bureaucracy intertwine."

No One Wants to Serve on House Financial Services?

posted by Adam Levitin

The Washington Post reports today that many of the incoming Democratic freshman representatives do not want to serve on the House Financial Services Committee, traditionally a plum assignment because it facilitates representatives' ability to fund-raise for their reelection.  I'm proud to say that the member-elect who is proudly bucking the trend is our former co-blogger, Katherine Porter, and I can confidently say that her interest in the committee has nothing to do with fund-raising and everything to do with its jurisdiction.  

There are a lot of good reasons an incoming member might not want to serve on HFS--the member might have expertise or interest that more closely tracks the jurisdiction of another committee.  But I worry that the lack of interest also reflects a really problematic trend on the left. While many progressive politicians like to decry abuses in the financial services industry, they often have little to no understanding of the industry and aren't interested in gaining one.  The industry and its regulation are complex.  Its often not as intuitively understandable as, say, issues of criminal justice reform.  But its consequences are at least as far-reaching, both because all Americans depend on financial services and because of the influence of financial services on the whole political process.  Any politician who is concerned about social inequality ought to be deeply engaged with financial regulation.  It's not the low-hanging fruit, perhaps, but it's where the future of the middle class will be decided.  

Sadly, this phenomenon isn't limited to progressive politicians.  It's endemic on law school faculties.  I recall several years ago hearing colleagues bemoaning the financial crisis foreclosure crisis, but having absolutely no clue about what led up to it and what was contributing to it.  They did, however, have lots of strong normative views on methods of Constitutional interpretation.  The irony here is that my colleagues very much understand that dry, technical legal rules can have enormous social consequences.  But they prefer to engage primarily with social justice, rather than economic justice issues, even though the two are intimately linked.  I suspect this is part of the general phenomenon of the legal academy having disengaged with its traditional bread-and-butter---commercial law.  But it meant that much of the progressive establishment was asleep at the wheel (if not financially co-opted) when financial deregulation occurred in the 1990s and 2000s. 

To be sure, there's a small cadre of progressive thought-leaders and politicians (most notably some of our former co-bloggers) who have taken the time to understand the financial system in depth, and they've contributed in an out-sized manner to financial regulatory debates.  But the fact remains that most progressives don't want to touch financial and commercial regulation.  And we're all the worse off for it.  

Maybe it's not a new problem after all

posted by Stephen Lubben

Consider:

Seldom are business bankruptcy cases initiated under Chapters I to VII, inclusive, as well as under Chapters X and XI, where all or substantially all of the assets have not been pledged as collateral for the payment of debts. This pledging of assets tends to create serious questions in connection with the administration of the estates. In cases where the debtor is engaged in business, the receiver or trustee is quite often without free assets with which to carry on operations. There is no money in hand and no means of raising funds necessary to take care of fixed and direct charges essential for the maintenance of the business, without impinging upon the rights of the secured creditors. Debtors who might otherwise be reorganized in the public interest are unable to continue in business long enough to develop alternate means of financing and negotiate accommodations with their creditors.

Charles Seligson, Major Problems for Consideration by the Commission on the Bankruptcy Laws of the United States, 45 Am. Bankr. L.J. 73, 87-88 (1971).

Procedural Justice and Corporate Reorganization

posted by Pamela Foohey

I just posted to the Social Science Research Network my response -- Jevic's Promise: Procedural Justice in Chapter 11 -- to Jonathan Lipson's recent article about Czyzewski v. Jevic Holding Corp. and structured dismissals. In his article, The Secret Life of Priority: Corporate Reorganization After Jevic, Lipson frames Jevic as about process, as compared to its usual frame as about priority. Drawing from this frame, my response focuses on Jevic's implications for procedural justice and corporate reorganization.

The process values that Lipson identifies--particularly participation and procedural integrity--align with research about what people want from the justice system's procedures. This procedural justice research also teaches that the process of adjudication is as important as the final outcome. Combining Lipson's arguments with procedural justice research, I argue that corporate reorganization's process has been co-opted in the name of value preservation. I also rely on Slipster Melissa Jacoby's recent work conceptualizing corporate bankruptcy as a public-private partnership, which she's blogged about here and here, in arguing that Jevic's emphasis on process should embolden bankruptcy courts to more rigorously assess chapter 11's procedures. In the response, I provide two examples.

Continue reading "Procedural Justice and Corporate Reorganization" »

Developing Personal Insolvency Crises in China and India

posted by Jason Kilborn

What is it like to be desperately insolvent with no access to a relief system like the bankruptcy discharge? Many, many people are likely to find out in the coming months in China and India in light of recent developments in these mammoth markets. Neither country currently offers individuals effective relief from financial distress, though both have been actively but languidly considering the adoption of such relief for a long time. That relief can't come soon enough, though I'm not optimistic about its arrival anytime in the near future.

In China, the government is stepping up its efforts to all but eliminate P2P lending platforms, the only reliable source of finance for most individuals and small businesses. I'm afraid Bob Lawless's "paradox of consumer credit" will apply here: a rapid constriction in the supply of consumer/small business credit will lead to a spike in financial distress that can't be avoided by refinancing ... leading to even greater need for an individual bankruptcy remedy that China still lacks. To be sure, many of these P2P lending networks have been ponzi schemes, victimizing innocent investor-lenders and needing to be shut down, but I fear an over-correction here. Resolving 1.22 trillion RMB ($176 billion) in loans extended by 50 million investor-lenders to goodness knows how many small borrowers will be no small feat, especially with no formal insolvency framework to organize the effort. 

Meanwhile in India, the hot mess of corporate debt has begun to cool off, leaving debt buyers hungry for even riskier loans to purchase and pursue. So they're refocusing on defaulted consumer debt. The short-term target is debt secured by homes and cars, likely to produce greater returns from the collateral, but what of the inevitable deficiencies? Unsecured personal liability for deficiency judgments will certainly be on the to-do list of these buyers in the near term, and they are already making plans for the longer term to expand to unsecured education and credit card loans.

While India and China have both made admirable progress in reforming their business insolvency systems, the tragedy unfolding in the consumer and small business sectors cries out for serious attention. These debtors are not deadbeats whom authorities can be content to leave to their chosen fates; they are the victims of global economic volatility, the lifeblood of developing economies, and the center of harmonious societies. China and India would advance and humanize their development in a massive way by finally addressing the gaping hole in their insolvency frameworks to add proper treatment for individual debtors.

Expanding the Supreme Court to Depoliticize It

posted by Adam Levitin

I've got an op-ed in The Hill that calls for an expansion of the Supreme Court as a way to depoliticize it.  And to be clear, I'm not calling for Court-packing by Dems.  That would only require adding a couple of seats.  I'm calling for a major structural change in the Court—an expansion plus a shift to sitting in panels.  And I'm perfectly fine if the majority of the initial picks went to President Trump, as I think that the structural change would be very healthy for the Court and the political process, and with a larger Court, there will be much more frequent turnover among Justices.  

I'm sure my proposal will be some skepticism (to say it lightly), whether because folks think this is a barely closeted Court-packing scheme (but why bother with this when there's a much simpler way to pack the Court), or because they somehow think that there's something sacred or efficient about 9 Justices (clearly those folks have never been to a SCOTUS oral argument, but I suspect those are also the same folks with the naive idea that judges ever merely apply the law as written).  

Yet, I think a SCOTUS expansion is coming in any future Democratic administration for a very simple reason:  Republicans overplayed their hand and upset the basic equilibrium of the Court.  Democrats were far from happy with the Court before Trump, but the Court was basically a wash:  it made both Dems and Reps unhappy on certain issues.  As long as no side overreached, the Court was able to maintain a level of legitimacy.  If the Court now veers right, that will be lost, and all bets are off about preserving its current form.  There are lots of ways the Court could be remade; I'm trying to find one that creates a healthier judicial system.  And note that it only takes 50 votes in the Senate, not a Constitutional amendment, to expand the Court, but that it can't be dialed back without vacancies or a Constitutional amendment.  

For Cause Removal of the CFPB Director?

posted by Adam Levitin

Mick John Michael Mulvaney's callow pursuit of a CFPB name change raises an intriguing question:  what should be done with a CFPB Director who spends all of his or her time showboating with political issues rather than actually carrying out the law?  

The CFPB Director is removable only for cause, as the PHH case confirmed. Back with Richard Cordray was Director, Republicans reportedly were attempting to assemble a dossier to justify his for-cause removal.  In the case of Cordray, the gist of the allegations was that he overstepped his authority by daring to issue non-binding regulatory guidance about indirect auto lending or was profligate in the renovations of the CFPB's 1960s-era headquarters building. But here's the thing.  The "for cause" removal statute has actual statutory language, and it does not explicitly include either overstepping authority or profligacy.  Instead, it covers "inefficiency, neglect of duty, or malfeasance in office."  There's some imprecision in these words, but the statutory language seems aimed at failure to act, rather than over-zealous action.  This interpretation makes sense because the courts are available to prevent against over-zealous actions, but only the President can take care that the law is in fact faithfully executed.  

As long as Donald Trump is President, the for cause removal language is of little importance.  Kathleen Kraninger is about to be confirmed as the CFPB Director, and her five-year term will extend past 2020, which means she might potentially serve under a Democrat President's administration.  If Kraninger operates similar to Mulvaney, focusing on things like the name of the agency and internal restructuring designed to undermine the agency's effectiveness, rather than on carrying out the agency's mission, that "for cause" dismissal language could actually have some bite.  

Let me be clear.  Historically, for cause dismissal has never been used.  I am unaware of any past case approving the actual for cause dismissal of an agency head (but let me know if I missed one).  Yet I think the implicit political rules have changed over the last few years such that this is no longer something that is beyond the Pale.  If Kraninger follows in the footsteps of Mulvaney, then at the very least, a Democratic President in 2021 would have a credible threat of for cause removal of Kraninger (and there would certainly be political pressure for the President to act).  This counsels for Kraninger to take a more energetic approach to carrying out the CFPB's statutory mission than that pursued by Mr. Mulvaney, who has gotten hung up on the statutory name and political headlining at the expense of the agency's mission

The Cost of the CFPB Name Change

posted by Adam Levitin

Mick John Michael Mulvaney's wanted to change the CFPB's name to the Bureau of Consumer Financial Protection (BCFP), and indeed, the Bureau has already changed its signage and the name it uses on some of its communications.  But the name change has not had full effect yet, and it is now reported that it would not only cost the CFPB more than as much as $19 million, but it could cost regulated firms as much as $300 million.  

It's worth comparing that $300 million cost to industry for Mulvaney's vainglorious renaming project to the funds that the Bureau has recovered from wrongdoer's on Mulvaney's watch.

Continue reading "The Cost of the CFPB Name Change" »

Seeking nominations for the Grant Gilmore Award

posted by Melissa Jacoby

GilmoreThe American College of Commercial Finance Lawyers seeks nominations for scholarly articles to be considered for the Grant Gilmore Award. It is not awarded every year, but when it is, the main criteria is "superior writing in the field of commercial finance law."  I am chairing the award committee this year, so please email me or message me on Twitter before December 14 to ensure your suggestion is considered. Especially eager to get suggestions of articles written by newer members of the academy that might otherwise be missed.

Reflections on the foreclosure crisis 10th anniversary

posted by Alan White

Before it was the global financial crisis, we called it the subprime crisis. The slow, painful recovery, and the ever-widening income and wealth inequality, are the results of policy choices made before and after the crisis. Before 2007, legislators and regulators cheered on risky subprime mortgage lending as the "democratization of credit." High-rate, high-fee mortgages transferred income massively from working- and middle-class buyers and owners of homes to securities investors.

After the crisis, policymakers had a choice, to allocate the trillions in wealth losses to investors, borrowers or taxpayers. U.S. policy was for taxpayers to lend to banks until the borrowers had finished absorbing all the losses. The roughly $400 billion taxpayers lent out to banks via the TARP bailout was mostly repaid, apart from about $30 billion in incentives paid to the mortgage industry to support about 2 million home loan modifications, and $12 billion spent to rescue the US auto industry. The $190 billion Fannie/Freddie bailout has also returned a profit to the US Treasury.  Banks recovered quickly and are now earning $200 billion in annual profits. Of course, equity investors, particularly those wiped out by Lehman and many other bankruptcies, or by the global downturn generally, lost trillions as well. The long-term impact, however, was to shift corporate debt to government balance sheets, while leaving households overleveraged.

Thomas Herndon has calculated that 2008-2014 subprime mortgage modifications added $20 billion to homeowner debt (eroding wealth by $20 billion). In other words, all the modification and workout programs of the Bush and Obama administrations did not reduce homeowner debt by a penny. In fact, mortgage lenders added $20 billion (net) fees and interest onto the backs of distressed homeowners. During the same period, $600 billion in foreclosure losses were written off by private mortgage-backed securities investors, implying a similar or greater loss in wealth for foreclosed homeowners. These data include only the private-label side of the housing finance market; adding the debt increase and wealth losses for Fannie and Freddie homeowners could conceivably double the totals.

Nearly 9 million homes were foreclosed from 2007 to 2016. While some were investor-owned, even those often resulted in the eviction of tenant families. Four and one-half million homeowners still remain underwater, i.e. owe more mortgage debt than the value of their home.

 While baby boomers' housing wealth was decimated by foreclosures and increasing mortgage debt, millennials piled on student loan debt, closing the door to home buying and asset building. A recovery built on incomplete deleveraging, and new waves of consumer debt buildup, contains the seeds of the next crisis. While various pundits bemoan the resurgent federal fiscal debt, we would do well to address policies that continue to stoke unsustainable household debt.

My Favorite Two Sentences From a Recent Case . . .

posted by Mitu Gulati

Over the past few days, I've been struggling with trying to understand a new NY case involving secured debt. The fact that I had to struggle to understand the transaction made me feel insecure enough (on occasion,  I purport to teach corporate debt), but then when I tried to delve deeper into the case by looking at the underlying contracts (the "Collateral Pledge" Agreement - yuck), I got even more confused and insecure because I found the darn thing utterly incomprehensible.  Indeed, a whole half of that document seemed like it had been drafted for an entirely different type of transaction and the crucial provision that I was looking for didn't even seem to be there. But since I couldn't understand it, I couldn't be sure.  Maybe that provision was buried in some other provision that I couldn't figure out . . .

Then, while wallowing in insecurity, I came across this from a recent bankruptcy case out of the Third Circuit (thank you. Third Circuit blog for making me feel better):

The Third Circuit affirmed a ruling leaving in place a tenant’s favorable lease terms after the landlord declared bankruptcy and was purchased free and clear. Best line: “The Lease is long and neither simple nor direct. Indeed, it is an almost impenetrable web of formulas, defined terms, and cross-references–a ‘bloated morass,’ in the words of the Bankruptcy Court.”

I'm turning now to reading the briefs for the Aurelius v. Puerto Rican Control Board/Commonwealth of Puerto Rico case (oral argument on Monday).  As compared to that Collateral Pledge Agreement, these briefs read like a beautiful novel.  The briefs on both sides are beautifully written, in clear, short and comprehensible sentences.  Maybe litigators should be the ones drafting contracts?

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