A Comparative Study of Bankruptcy as Bailout

Brooklyn Journal of Corporate, Financial and Commercial Law, Forthcoming

Seton Hall Public Law Research Paper No. 1780550

21 Pages Posted: 8 Mar 2011  

Stephanie Ben-Ishai

Osgoode Hall Law School

Stephen J. Lubben

Seton Hall University - School of Law

Date Written: March 7, 2011

Abstract

In this article, using a comparative approach (Canadian versus American and automotive versus financial sectors), we build on the defense of the Chapter 11 automotive cases that one of us has already put forward elsewhere. That is, the Chrysler and GM cases did not subvert normal Chapter 11 practice. Rather, we argue that the automotive cases are a good case study of how governments can provide money to a failing but significant industry in a consistent and transparent manner. This article is not about whether governments should fund failing industries. Rather, we argue that once such a decision has been made, the bankruptcy system is an effective way to implement such a decision. Further, using the bankruptcy system to effect government funding of a failing industry does not distort the bankruptcy system.

Keywords: Chapter 11, CCAA, Lehman, AIG, GM, ABCP

Suggested Citation

Ben-Ishai, Stephanie and Lubben, Stephen J., A Comparative Study of Bankruptcy as Bailout (March 7, 2011). Brooklyn Journal of Corporate, Financial and Commercial Law, Forthcoming; Seton Hall Public Law Research Paper No. 1780550. Available at SSRN: https://ssrn.com/abstract=1780550

Stephanie Ben-Ishai

Osgoode Hall Law School ( email )

4700 Keele Street
Toronto, Ontario M3J 1P3
Canada

Stephen J. Lubben (Contact Author)

Seton Hall University - School of Law ( email )

One Newark Center
Newark, NJ 07102-5210
United States
973-642-8857 (Phone)

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