This post is made by Hon. Colleen A. Brown, Chief Bankruptcy Judge, D. Vt. The abstracts of the Symposium topics are by each of the professors presenting the topic.
The ABLJ/ABA Symposium onThe NCBJ at 90: The Evolution, Role, and Impact of Bankruptcy Courts from 1926 to 2016
This year the NCBJ will present its Second Annual American Bankruptcy Law Journal Symposium on Thursday October 27th, from 3:00 to 5:00 p.m. It is open to all NCBJ Conference registrants. The ABLJ is delighted to welcome the ABA as its Symposium co-sponsor. The Symposium is a unique program at the NCBJ Conference. It focuses on scholarly exploration of topics based on recent empirical studies.
The Symposium is unique both in its content and format. The content of this year’s Symposium celebrates the NCBJ’s 90th anniversary. The presenters are four nationally respected bankruptcy scholars who conducted empirical studies on topics reflecting the evolution of the bankruptcy courts over the last 90 years in the areas of municipal law, exercise of equitable powers, valuation techniques, and collaboration among the various constituents of the bankruptcy community.
The format will be more of a conversation than a presentation. In describing the evolution of the bankruptcy courts, each of the four scholars will present the results of their empirical study and the conclusions they draw from the data. They will also discuss among themselves how their conclusions complement or raise questions about the findings of their colleagues on the dais. The ABLJ will publish an article by each scholar covering their respective Symposium topics, in a single special edition of the Journal available in early 2017.
The topics, described in more detail below, are:
- Professor Karen M. Gebbia, Golden Gate University School of Law: Keepers of the Code: Evolution of the Bankruptcy Community from 1926 to the Present
- Professor John A. E. Pottow, Michigan Law School: The Rise and Fall of Bankruptcy Courts’ Equitable Powers Over the Past 90 Years
- Professor: Melissa B. Jacoby, University of North Carolina Law School: Municipal Bankruptcies and Bankruptcy Courts: Then and Now
- Professor Michael Simkovic, Seton Hall University School of Law: The History of Valuation Techniques in the Bankruptcy Court, 1926-2016
We hope to see you there!
THE KEEPERS OF THE CODE: EVOLUTION OF THE BANKRUPTCY COMMUNITY 1926 – 2016 © 2016,
by Professor Karen M. Gebbia
At the Symposium, Professor Gebbia will examine the development and influence of the modern bankruptcy community over the past 90 years, since the founding of the National Conference of Bankruptcy Judges. She will articulate essential characteristics of the bankruptcy community, and describe the fundamental ways in which that community has evolved over several distinct eras. She will then hypothesize that the bankruptcy community’s influence on bankruptcy law might vary depending on the nature of the debate. To explore this question, she will argue that the evolution of bankruptcy law, both historically and today, centers on three interrelated arcs:
(i) bankruptcy law’s substantive balancing of equities among creditors and debtors; (ii) the locus of control over, and essential nature of, the system that administers bankruptcy law; and (iii) the clarity and coherence of bankruptcy law. Professor Gebbia will employ this framework to explain the role the bankruptcy community has played at critical junctures in the development of modern bankruptcy law. Finally, she will apply this perspective to make specific recommendations regarding the manner in which the bankruptcy community, including the NCBJ, may most effectively engage in today’s ongoing debates over the future of bankruptcy law.
MUNICIPAL BANKRUPTCY AND BANKRUPTCY COURTS: THEN AND NOW
by Professor Melissa B. Jacoby; Abstract as of June 1, 2016
The National Conference of Bankruptcy Judges, now celebrating its Ninetieth birthday, was created relatively shortly before the establishment of a novel municipal bankruptcy law. Both the bankruptcy judiciary and municipal bankruptcy have changed dramatically since that time – both with and without statutory amendment – but there has been little attention to how they intersect. At first, municipal bankruptcies were not only minimalist in scope and detail (essentially a prepackaged bond restructuring), but also handled by generalist Article III judges of the federal district court. Today, bankruptcy judges play central roles in shaping both the procedure and substance of chapter 9 cases, which look completely different from the municipal bankruptcies contemplated in the 1930s legislation, and bearing considerably more resemblance to “freefall” chapter 11s. Yet, at the time of this writing, Congress is considering requiring that the largest- ever government bankruptcy on the horizon (Puerto Rico) be managed by a district judge. That decision would be a big mistake, reflecting a misunderstanding of the evolution of both municipal bankruptcy and the bankruptcy judiciary over the last 80-90 years.
THE EVOLUTION OF VALUATION IN BANKRUPTCY
by Professor Michael Simkovic
Financial analyses such as valuation, solvency, and capital adequacy play a crucial role in bankruptcy. They are central to allowance of claims, adequate protection, avoidance actions such as fraudulent transfer and preference, and plan confirmation. Today, the established methods of financial analysis accepted by most bankruptcy courts include discounted cash flow (DCF), comparable companies and comparable transactions. However, newer methods based on market prices for equity, debt, or options and derivatives are supplementing, and in some cases supplanting more established approaches. The new market-based methods are generally considered to be more objective, free of hindsight bias, harder to manipulate, and less expensive to implement. However, courts may not fully understand how market information should be interpreted, and have correctly noted that such information could be of limited value if critical contemporaneously known information was not available to investors. In this time of transition between methods of financial analysis, it may be helpful to look back, tracing the evolution of methods of valuation in bankruptcy. Today’s “established” methods—DCF and comparables—were also once new, less than fully understood, and met with suspicion by the courts. Understanding how these methods went from novel and controversial to established and accepted can help shed light on what we might expect to see during the anticipated transition from DCF and comparables toward more fully market-based approaches.