Emory Bankruptcy Developments Journal

Volume 31Issue 2
The Twelfth Annual Emory Bankruptcy Developments Journal Symposium
Comments

A Study on Bankruptcy Crime Prosecution Under Title 18: Is the Process Undermining the Goals of the Bankruptcy System?

Leia Clement | 31 Emory Bankr. Dev. J. 409 (2015)

The federal bankruptcy system depends upon the United States Trustee Program to identify bankruptcy fraud and upon the United States Attorney’s Office to take appropriate action. This Comment seeks to provide insight into the factors that affect whether a case is selected for prosecution or dismissal. It analyzes the available data compiled on bankruptcy fraud cases from the fiscal years of 2010 and 2011 with respect to the following factors: specific bankruptcy fraud criminal violations, United States Code violations, the identity of the defendants, the types of bankruptcy filing involved, the verdicts, and the sentences resulting from guilty verdicts. This Comment concludes that bankruptcy fraud is not being sufficiently prosecuted, resulting in harm to creditors, debtors, the government, the court, and the public as well as the policies underlying the bankruptcy system.

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Creditors’ Committees: Giving Tort Claimants a Voice in Chapter 11 Bankruptcy Cases

Corinne McCarthy | 31 Emory Bankr. Dev. J. 431 (2015)

Unlike shareholders, lenders, or even the corporate debtor’s employees, tort claimants often do not choose to engage in commercial transactions with corporate debtors. Rather, their claims arise because the debtor has harmed them without their consent. While courts have the authority to form creditors’ committees for tort claimants, courts do not uniformly grant tort claimants’ requests. This Comment argues that courts should form creditors’ committees for tort claimants when corporate debtors with tort liability file for bankruptcy. First, there are strong policy reasons for forming creditors’ committees for tort claimants. Second, courts need to form creditors’ committees for tort claimants to ensure that tort claimants are guaranteed due process of the law. Third, forming creditors’ committees for tort claimants is consistent with the case law interpreting 11 U.S.C. § 1102(a)(2). Finally, forming creditors’ committees for tort claimants has practical significance.

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Stop Right There: Limiting Judicial Estoppel in the Bankruptcy Context

Mary Frances McKenna | 31 Emory Bankr. Dev. J. 465 (2015)

The majority of courts take the position that, if a plaintiff-debtor knew of a potential or pending lawsuit but failed to list it in the bankruptcy case, the plaintiff-debtor should be categorically estopped from pursuing the cause of action against the defendant. However, judicial estoppel produces an inequitable result where the plaintiff-debtor omitted a lawsuit from the bankruptcy case because of a mistake. In that case, the alleged wrongdoer prevails regardless of the strength of the plaintiff’s claim or the plaintiff’s culpability excluding the potential or pending lawsuit from the bankruptcy filings. This Comment argues that using a subjective inquiry to determine when to invoke judicial estoppel better serves the objectives of bankruptcy law and maintains the integrity of the judicial process. This subjective inquiry focuses on five factors to determine whether the debtor’s omission was the result of inadvertence or mistake.

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