A significant part of my law practice is devoted toward legal representation in bankruptcy proceedings. Our firm regularly represents debtors in corporate reorganizations cases (Chapter 11) as well creditors seeking to enforce their rights against debtors. This type of practice requires a good grasp of contract law, financial transactions, and the Bankruptcy Code.
As your textbook states, the twin goals of bankruptcy are (1) To protect a debtor by giving him or her (or a company) a fresh start without creditors’ claims; and (2) To ensure equitable treatment of creditors who are competing for a debtor’s assets.
After reading Chapter 15 on Creditors’ Rights and Bankruptcy, do you agree that we should allow corporations a “fresh start” through bankruptcy? Often in bankruptcy, creditors who may have provided services to the debtor, and who are owed substantial amounts, receive little to nothing once the debtor files bankruptcy. Is this fair to creditors?
Explain what remedies creditors have to respond to the “automatic stay” that takes place once the bankruptcy is filed. That is, what can creditors ask the court to do and what protections do creditors have in response to the automatic stay? Are these enough to balance the protection debtors receive by filing bankruptcy?
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