The Debt Limit Is Unconstitutional—But It's Not What You Think!
Anna Gelpern, Stephen Lubben and I have an article in The American Prospect entitled The Debt Limit Is Unconstitutional—but Not for the Reason You Think.
News & Comments
Debunking Debt Ceiling Myths
The commentary on the debt ceiling standoff has featured a bunch of mistaken conceptions from across the political spectrum. Let's address them.
Myth #1: The 14th Amendment Prohibits a Default
A variety of commentators claim that the 14th Amendment prohibits the United States from defaulting. It does nothing of the sort. Read the text of the Public Debt Clause:
Community Financial Services of America v. CFPB Amicus Brief
This fall the Supreme Court will be hear a case captioned Community Financial Services of America v. Consumer Financial Protection Bureau, dealing with the constitutionality of the CFPB's funding mechanism. I'm pleased to announce that Patricia McCoy and I filed an amicus brief today in support of the CFPB.
14-4: Any Questions?
Anna, Adam, and myself have a piece up on Alphaville about section four of the 14th Amendment, which is all the rage these days.
Calculation of Secured Claims
When I was a law student the rule I learned about secured claims was that they accrue post-petition interest and attorneys' fees (if provided for by contract or statute) up to the amount of the value of the collateral that exceeds their claims, but then nothing further once they are fully secured. That was an easy enough rule to apply.
LTL 2.0: The Largest Fraudulent Transfer in History
[Updated 4.12.23 to reflect the transcript of the first day hearing with much more detailed analysis of LTL's arguments regarding fraudulent transfer allegations.]
LTL, Part Deux (now with even more fraudulent transfers!)
This post is a joint post by Hon. Judith K. Fitzgerald (ret.)[*] and Adam Levitin
Here we go again. Precisely one hour and thirty-nine minutes after the dismissal of the bankruptcy filing of LTL, Johnson & Johnson’s artificially created talc-liability subsidiary, the company was right back at it again with the filing of a new chapter 11 case in New Jersey, again assigned to Judge Kaplan.
CFPB Details "Abusive" in Policy Statement and Speech
In a few hours, I'll have the pleasure of hosting CFPB Director Rohit Chopra for a virtual talk at UCI Law (today at 12pm PDT, 3pm PDT). You can still join us by registering for the Zoom link here.
It's Not Just an SVB Problem: the Systemic Nature of the Bank Regulation Failure
A mid-sized regional bank specializing in lending to tech start-ups, crypto companies, or law firms hardly seems of systemic importance, even if its failure would have caused disruption in some industries regionally and might have triggered a cascade of corporate bankruptcies because of large uninsured deposit balances. That sort of collateral damage from a bank failure is unfortunate and painful for those involved, but that's the nature of market discipline.
FDIC's Poor Track Record in Holdco Bankruptcies
Last week I did a post about how the FDIC as receiver for Silicon Valley Bank probably doesn't have a claim against SVB Financial Group, the holdco of the bank. I got some pushback on that (including from a former student!), but I'm sticking to my guns here. It's a result that seems wrong and surprising, but if you look at the three most recent big bank holdco bankruptcies (this takes some digging in old bankruptcy court dockets), the FDIC has ended up with little or no claim.
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