The Proceduralist Inversion – A Response to Skeel

Yale Law Journal Forum Vol.130, p. 335, 2020

Brooklyn Law School, Legal Studies Paper No. 650

22 Pages Posted: 11 Dec 2020

See all articles by Edward J. Janger

Edward J. Janger

Brooklyn Law School

Adam J. Levitin

Georgetown University Law Center

Date Written: December 7, 2020

Abstract

In Distorted Choice in Corporate Bankruptcy, David Skeel offers a nuanced description of restructuring support agreements (RSAs) and how they can help a debtor to achieve the necessary consensus around a proposed Chapter 11 plan of reorganization. In this Essay we take issue with Skeel’s permissive view toward RSAs that include provisions, such as pre-disclosure lock-ups, milestones, and coercive deathtraps, that short circuit the “process” protections contained in Chapter 11. Chapter 11 contemplates bargaining in the shadow of certain basic statutory “distributional” entitlements: equal treatment, best interests, full cash payment of administrative expenses, and a guaranteed minimum-cramdown distribution. As such, RSAs can either reinforce the link between entitlement and distribution, or they can sever it. Skeel insufficiently appreciates the purpose of process—how procedural protections such as classification, disclosure, and solicitation surrounding the vote forge the crucial link between bankruptcy bargaining and core principles of corporate governance and prebankruptcy entitlement. We offer, instead, an approach which sorts between process-enhancing RSAs and those that facilitate end-runs.

Suggested Citation

Janger, Edward J. and Levitin, Adam J., The Proceduralist Inversion – A Response to Skeel (December 7, 2020). Yale Law Journal Forum Vol.130, p. 335, 2020, Brooklyn Law School, Legal Studies Paper No. 650, Available at SSRN: https://ssrn.com/abstract=3744245

Edward J. Janger (Contact Author)

Brooklyn Law School ( email )

250 Joralemon Street
Brooklyn, NY 11201
United States
718-780-7995 (Phone)
718-780-0376 (Fax)

Adam J. Levitin

Georgetown University Law Center ( email )

600 New Jersey Avenue, NW
Washington, DC 20001
United States

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
31
Abstract Views
151
PlumX Metrics