November 17, 2021 - by Elliot Ganz. On November 16, 2021, the LSTA hosted the latest in its quarterly series of webinars covering Recent Developments in Bankruptcy. This installment was moderated by the LSTA’s Elliot Ganz and featured Richard Levin of Jenner & Block. The session started with a discussion of two provocative law review articles, transitioned to a discussion of recent bankruptcy-related legislative proposals, and ended with an analysis of several important bankruptcy decisions.
The first law review article discussed was “Chapter 11’s Descent into Lawlessness” by Lynn Lopucki of UCLA. The article, which we recently summarized, asserts that competition for cases among a small number of bankruptcy courts has led to rampant disregard for bankruptcy law in an effort to placate the “case placers” who take advantage of loose venue laws and determine where to file bankruptcy cases. Mr. Levin took issue with many of professor LoPucki’s assertions while still acknowledging that venue shopping in bankruptcy can be problematic. The second article, “Shocking Business Bankruptcy Law”, by Mellissa Jacoby of the University of North Carolina, argues that the intersection of major crises and financial distress can be used opportunistically in big Chapter 11 cases to unravel bankruptcy law and shift the system further away from the objective of responding to over indebtedness. Mr. Levin then discussed two bills, the Non-Debtor Release Prohibition Act of 2021, and Bankruptcy Reform Act of 2021 (which we summarized here). Mr. Levin described the non-debtor release bill as a broad overreach that would prohibit third party releases in almost all cases. Both Mr. Ganz and Mr. Levin expressed doubt about the chances that either of these bill can pass in the current Congress. The remainder of the webinar focused on bankruptcy cases concerning topics such as fraudulent transfer, executory contracts, structured dismissals, and Subchapter V (small business bankruptcy) cases. Presentation materials are available here.