Spring 2018 Course Schedule

Corporate Bankruptcy (LAW-625-001)
Walter Effross

Meets: 09:30 AM - 11:20 AM (Tu) - Warren - Room N103

Enrolled: 7 / Limit: 22

Administrator Access


Assessment: Take-home exam, essay questions,Class Participation


Corporate Bankruptcy- Professor Effross (Spring 2018) (Course 625-001)

[for auditing option, see end of this document]

The bankruptcy reorganization process (Chapter 11) affords business entities (debtors) extraordinary forms of relief from the claims and legal actions of creditors, while attempting also to accommodate the interests of creditors, shareholders, stakeholders, and the debtor’s directors and officers. It invokes basic and far-reaching issues of trust, fairness, stability, continuity, flexibility, predictability, and redemption.

Corporate bankruptcy law is one of today’s most intellectually exciting and most “portable” (among firms and states) practice areas. It has the virtues both of specialization (as a separate and intricate legal field) and universality (in its interaction with a wide variety of other areas of law); it offers opportunities to engage not only in transactional work but also in litigation; and it enables counsel in any practice to protect a corporate client from its own potential or actual insolvency, as well to as to help all clients cope effectively with the insolvencies of their corporate trading partners.

This course examines—with the aid of actual filings in, and reporting and commentary about, the current reorganization proceedings of retailer Toys “R” Us—not only the practical/operational details of representing different parties in the reorganization process but also the ongoing policy battles over Chapter 11’s philosophy, fairness, efficiency, effectiveness, and evolution.

Topics addressed include:

? alternatives to Chapter 11; pre-bankruptcy corporate planning; pre-bankruptcy strategies for creditors; eligibility for and entrance into Chapter 11 (versus Chapter 7 liquidation); bankruptcy jurisdiction, venue, and forum-shopping;

? types of creditors; avoidance powers; the automatic stay; Obtaining and retaining property while reorganizing; treatment of claims and executory contracts in bankruptcy;

? special bankruptcy-related issues concerning: professional responsibility and legal ethics; tort liability; intellectual property; environmental law; corporate governance and fiduciary duties; and corporate social responsibility;

? preparing and filing a reorganization plan and disclosure statement; obtaining confirmation of the reorganization plan; discharge; and

? involuntary Chapter 11 petitions and other special tactics of creditors.

Readings will include (1) selections from a casebook; (2) portions of a practitioner’s manual; (3) elements of a recent American Bankruptcy Institute report proposing revisions to Chapter 11; and (4) supplemental material including caselaw, statutory and regulatory provisions, and items from law reviews, newspapers, magazines, and Web sites.

The examination will be an open-book take-home paper of 3,500 to 4,000 words on an assigned topic to be distributed on Tuesday, April 17 (in our final class session) and due by 5:00 p.m. on Tuesday, May 1 (the second day of exam period).

Business Associations is the only prerequisite for this course.

Learning Goals: To understand goals, processes, dynamics, and relevant provisions of the Bankruptcy Code, as well as related issues of professional ethics and legal and legislative drafting, with regard to corporate bankruptcy.

Learning Outcome: In the final paper, students will be able to analyze and respond critically to a general statement about the topics identified above.


[1] Preview and Overview

[2] Pre-bankruptcy Planning; Eligibility for and Entrance to Chapter 11

[3] Bankruptcy Jurisdiction and Venue

[4] Ethical/Compensation Considerations in Chapter 11; Types of Creditors; Avoidance Powers

[5] The Automatic Stay in Chapter 11

[6] Operating in Chapter 11 [I]: Property; Financing; Creditors; Governance; First Day Orders

[7] Operating in Chapter 11- [II]: Claims; Executory Contracts; Avoidance Powers

[8] Preparing and Filing a Reorganization Plan and Disclosure Statement

[9] Obtaining Confirmation of the Reorganization Plan; Discharge

[10] Special Structural Situations and Solutions: Scalability of Chapter 11; Single-Asset Real Estate Cases; and Pre-Packaged Bankruptcies

[11] Involuntary Chapter 11 Petitions, and Special Tactics of Chapter 11 Creditors

[12] Responses to Attacks on Chapter 11; The Future of Chapter 11

*Auditing Option:

Class audits are charged the same amount of tuition as classes taken for credit. However, full-time students (taking 12 or more credits for the semester) may audit this course for no additional tuition fee as they are already being charged a flat fee.

Audit students do not receive credit for the course, but it will appear on their transcript with a grade of “L” to indicate auditing.

Textbooks and Other Materials

The textbook information on this page was provided by the instructor. Students should use this information when considering purchases from the AU Campus Store or other vendors. Students may check to determine if books are currently available for purchase online.

1) Harvey J. Williamson, The Attorney’s Handbook on Small Business Reorganization

Under Chapter 11 (13th ed. 2017) (Argyle Publishing);

(2) Scarberry, Klee, Newton & Nickles, Business Reorganization in Bankruptcy:

Cases and Materials (4th ed. 2012) (West) (Both of these books are available on reserve in the Pence Law Library.)

First Class Readings

Not available at this time.