Rediscovering Corporate Governance in Bankruptcy

21 Pages Posted: 8 Nov 2015 Last revised: 19 Mar 2016

See all articles by David A. Skeel

David A. Skeel

University of Pennsylvania Law School; European Corporate Governance Institute (ECGI)

Date Written: March 2016


In this Essay on Lynn LoPucki and Bill Whitford’s corporate reorganization project, written for a symposium honoring Bill Whitford, I begin by very briefly describing its historical antecedents. The project draws on the insights and perspectives of two closely intertwined traditions: the legal realism of 1930s, whose exemplars included William Douglas and other participants in the SEC study; and the law in action movement at the University of Wisconsin. In Section II, I briefly survey the key contributions of the corporate governance project, which punctured the then-conventional wisdom about the treatment of shareholders in bankruptcy, managers’ principal allegiance, and many other issues. In Section III, I consider two major shifts that have taken place in Chapter 11 practice in the twenty-five years since the study: the rise of creditor influence in Chapter 11, and shifts in the principal participants in (and scope of) large corporate reorganization cases. In Part IV, I explore one of LoPucki and Whitford’s key proposals — compensation for unsecured creditors when they are made to bear business risk in bankruptcy — and consider its potential relevance for the hotly debated, current question of the scope of a secured creditor’s lien in bankruptcy.

Keywords: Bankruptcy, corporate reorganizations, corporate governance, corporations, corporate finance, financial distress, insolvency shareholders, Chapter 11, compensation for unsecured creditors, Bill Whitford, Lynn LoPucki

JEL Classification: G33, G34, K22

Suggested Citation

Skeel, David A., Rediscovering Corporate Governance in Bankruptcy (March 2016). Temple Law Review, Vol. 87, P. 1021, 2015; European Corporate Governance Institute (ECGI) - Law Working Paper No. 307/2016; U of Penn, Inst for Law & Econ Research Paper No. 15-38. Available at SSRN:

David A. Skeel (Contact Author)

University of Pennsylvania Law School ( email )

3501 Sansom Street
Philadelphia, PA 19104
United States
215-573-9859 (Phone)
215-573-2025 (Fax)

European Corporate Governance Institute (ECGI)

B-1050 Brussels

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