This is a conversational text that provides a comprehensive view of the law of American business failure.

The second edition of the first and only concise introduction to American business insolvency law, this volume provides a succinct overview of American business bankruptcy as it is actually practiced, integrating the law as written and implemented, and now includes coverage of the Small Business Reorganization Act.

To Protect Their Interests is a groundbreaking historical account of how corporate bankruptcy became what it is today--a forum for battles between well-heeled insiders.

Designed for use in the Corporate Finance class, increasingly important in any skills-based curriculum, this casebook features a strong coverage of M&A, bankruptcy, finance, and valuation. The valuation unit covers math from a lawyer's perspective, focusing on the intuitions behind the valuation techniques in a way that will facilitate interaction with bankers and accountants in practice. Basic Excel skills are taught along the way. The second edition has been updated to include the most recent developments through 2017, and includes leading recent decisions from the New York Court of Appeals, United States Court of Appeals for the Second Circuit, the United Kingdom Supreme Court, and the Supreme Court of Canada, reflecting the increasingly global nature of corporate finance. Key Features: · The author, Stephen J. Lubben holds an endowed chair in corporate governance at Seton Hall and is the "In Debt" columnist for the New York Times's Dealbook page · Mathematically sophisticated but accessible, focusing the quantitative tools on motivating and understanding the business and concepts · Includes and refers extensively to deal documents throughout to establish a theme of the actual transactions to compare to the lines of cases describing how deals go bad · Practical, transactional approach to corporate finance · Organized around four basic units: valuation, finance, mergers and acquisitions, and financial distress

In early 2005, the American Bankruptcy Institute awarded me a $345,000 grant to conduct the most comprehensive, independent empirical study of professional fees in chapter 11 cases to date. This report represents the results of that study.

Nearly thirty years of chapter 11 scholarship offers little insight into the reasons why certain firms are unable to confirm a reorganization plan. This paper offers the first empirical model of why firms fail in chapter 11. Using a database of 945 chapter 11 cases filed in 2004, and a simple definition of chapter 11 failure as any case that is converted to chapter 7 or dismissed, I show that some of the most significant predictors of quot;failurequot; are observable on the first day of a chapter 11 case.

For almost as long as there have been bankruptcy laws, there have been complaints that the primary beneficiaries of these laws are insiders who administer the bankruptcy system. In recent decades, this line of criticism has carried with it an implicit criticism of bankruptcy courts, who are urged to more aggressively police the costs of bankruptcy. Indeed, at least one recent critic has unkindly suggested that the failure of the courts to control bankruptcy costs is the result of a corrupt bargain between bankruptcy courts and practitioners. Rarely addressed is why bankruptcy courts regulate professional costs at all. In most areas of American law, a professional is accountable solely to its client. Complaints about excessive cost might result in a separate malpractice action, but a client who thinks they have been overcharged for the defense of their speeding ticket will find little relief in traffic court. Why is bankruptcy different?This paper begins to look at this question with brief overview of the concept of bankruptcy costs, traditionally divided between direct and indirect costs. I next turn to a consideration of the process for overseeing bankruptcy costs. I briefly trace the history of court control of compensation in corporate bankruptcy, and then detail the current legal structure. The final part of the chapter then surveys the existing understanding of chapter 11 cost, and concludes with a some thoughts on the important questions that remain unanswered.In short, we know a bit about direct costs, but very little about any other sort of costs. Moreover, what we know is almost entirely lacking in context. This makes it quite hard to understand if the existing system of cost regulation is either useful or justified.

The concerns that animated the Delaware supreme court's decision in Smith v. Van Gorkom - inattentive directors failing the shareholders at a critical juncture in a firm's life - could have lead, even after the legislature enacted Section 102(b)(7), to the development of a duty of care jurisprudence based on non-monetary remedies. Instead, the Delaware supreme court developed a new law of transactions, built around banner cases such as Unocal and Revlon.Now, two decades latter, we ask two key questions: First, is there any duty of care left in Delaware? And, if the answer to the first question is no, is that a bad thing? We answer the first question by tracing the waning of the duty of care: a rule that now requires little more of a director than a ritualistic consideration of relevant data. Today, after the director engages in this ritual, her decision will not violate the duty. In short, the classic duty of care no longer exists in Delaware.But the Delaware courts clearly are not about to countenance every business decision, no matter how incoherent or ill-advised. So, they struggle to fit cases into either the loyalty or transactional model, even when these tools are ill suited to the task. No better example of this trend exists than the Delaware supreme court's decision in Omnicare, Inc. v. NCS Healthcare, Inc., where the court struggled to apply Unocal's entrenchment-based structure to deal protection devices in a friendly stock for stock merger.Because we argue that Omnicare could have been better addressed under a classic duty of care analysis - no reasonable director would have agreed to totally lock up the deal - we answer our second question in the affirmative. There is a role, albeit a limited, narrow role, for the courts to review and question some decisions, even in the absence of loyalty or transactional concerns.Thus, we use this paper to highlight a subtle, and even unintended consequence of Delaware's increasing reliance on the loyalty and transactional duties. While the result may be the same regardless of which tool the courts use, attempts to fit classic duty of care cases under other headings - perhaps in a misguided attempt to avoid Section 102(b)(7) - only muddle the development of a coherent analytical framework. In this paper, we argue for a reinvigoration of the classic duty of care analysis to preserve the distinct roles played by the director's fiduciary duties.

Given the vital place of ...