A Third Way: Examiners as Inquisitors

Abstract

“Litigate or settle” is the choice generally available to disputants in American courts, including bankruptcy courts. In authorizing examiners, however, the Bankruptcy Code provides one very specific procedural device peculiarly suited to introduce inquisitorial process into a chapter 11 case. Until recently, examiners were seldom employed, and even when employed were not a true inquisitorial alternative to “litigate or settle.” Rather, examiners would determine the legal sufficiency of a disputed claim but not opine on the merits or undertake to resolve factual disputes. The Tribune chapter 11 case, however, took a different approach to the examiner’s role. While not quite fully embracing an inquisitorial alternative to traditional bankruptcy dispute resolution, Tribune and a series of post-Tribune investigations have shown that inquisitorial methods make sense in certain large bankruptcy cases involving complex legal disputes. It may well be that chapter 11 examiners are the perfect persons to launch the inquisitorial experiment in the United States.

Part I introduces the thesis. Parts II and III set out the historical and comparative law inquisitorial alternatives to adversary litigation looking at English Chancery, European civil law systems and pre-Tribune examiner practices in US bankruptcy law. Parts IV and V contain the qualitative empirical analysis starting with a detailed look at Tribune and then discussing the small universe of post-Tribune cases in which examiners have been appointed. Part VI is the policy analysis of when and how Tribune-style inquisitorial examinations should be conducted.

Keywords: bankruptcy, civil practice and procedure, comparative law