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I. Course Summary and Class Structure
This course will introduce you to the law governing the relationships between financially distressed people and businesses (those who owe, “debtors”) and their creditors. We will discuss briefly some rights debtors and creditors have outside of bankruptcy (under state and federal law), but we will focus primarily on the rules in the federal Bankruptcy Code and the rights they provide to debtors to minimize or avoid obligations, as well as rights for creditors to pursue and preserve their claims. We will distinguish among several different kinds of creditor claims and their treatment in several different procedures for the liquidation-and-discharge or reorganization of debtors--both individuals and business entities--and their property. We will become familiar with the language of bankruptcy, including some terms from the law of secured finance.
We will spend most of our class time doing what lawyers do--working through problems to see how various rules apply to realistic fact scenarios. Other than the Supreme Court cases, the cases in the book are for illustration only--I will generally NOT discuss them or ask you to discuss them in class. I will try to limit the length of assignments, and you should be thoroughly prepared to work the problems. If, for whatever reason, you feel as though you are not able to participate effectively in class discussion, please let me know before class. You may excuse yourself from class discussion as often as necessary, but keep in mind 1) I will focus on those who have opted out of the previous class discussion in the next class meeting, and 2) your grade may be affected by your performance in class discussion (see below in “Evaluation”).
II. Course Goals
The primary goal of this course is to develop in each of you an understanding of federal and state debtor-creditor laws and the Bankruptcy Code, their roles in the federal/state legal system, and their application in analyzing and solving problems of financial distress. By the end of this course, you should be able to do the following:
appreciate and distinguish between debtor protections and creditor remedies based on state law as opposed to federal bankruptcy law and advise debtor and creditor clients as to strategies for pursuing one or another avenue of redress;
differentiate among and explain the stages of cases under Chapters 7, 11, and 13 of the Bankruptcy Code, especially requirements for access, protections for debtors and the rights of various kinds of creditors under each;
interpret any given provision of the Bankruptcy Code, both in isolation and especially in the broader context of the relevant provisions of the Bankruptcy Code and the system of administration of bankruptcy cases;
and ultimately, synthesize the relevant provisions of the Bankruptcy Code to analyze and evaluate fact hypotheticals to determine the rights and obligations of both consumer and business debtors and creditors in any given bankruptcy case.
III. Required Materials
Warren, Westbrook, Porter & Pottow, The Law of Debtors and Creditors (7th ed. 2014), Aspen, ISBN: 978-1-4548-2238-7.
The official text of the U.S. Bankruptcy Code. I suggest LegalPub's inexpensive and compact Code & Rules pamphlet, but virtually any Commercial Statutes supplement will do.
You will be evaluated primarily based on your performance on one final examination consisting of a few short essay questions and multiple-choice problems (to increase the scope of material tested). You may bring with you and refer to during the exam anything that is neither alive nor disturbing to other students. Class participation is especially important to me, however, so I reserve the right to adjust your final grade up or down by as much as a full letter grade, though most likely no more than a + or - based on the quality (not necessarily quantity) of your contribution. You do not necessarily have to announce the "correct answer" immediately to receive an upward adjustment--concerted and reasoned efforts to grasp the materials, and especially voluntary and well-reasoned responses to questions posed in class, may lead to an upward adjustment. Extreme absenteeism, frequent requests to be excused from class discussion, and failure to be prepared for the next class after being excused from class discussion, will provide the basis for a downward adjustment.
V. Suggested Supplemental Reading
If you find that you need more explanation of certain topics, I suggest the following three sources of supplemental discussion:
Jeffrey Ferriell & Ted Janger, Understanding Bankruptcy(Matthew Bender: 2d ed. 2007) (a general introduction to bankruptcy law, policy, and history).
Douglas G. Baird, Elements of Bankruptcy (Foundation Press: 5th ed. 2010) (broad discussions of general bankruptcy concepts and their rationales).
The multi-volume loose-leaf treatise Collier on Bankruptcy (16th ed. 2010), which offers in-depth discussions of bankruptcy law practice and theory.
If you need a quick little read to relieve you from the tedium of rules and problems, I highly recommend journalist Barbara Ehrenreich's investigative book Nickel and Dimed: On (Not) Getting By in America (2001) about the difficulties that low-wage Americans encounter in attempting to make ends meet.
One assignment per class meeting, 26 assignments over 13 weeks:
6. Redemption & Reaffirmation Read 185-201; work Problems 9.1-9.4.
7. Intro to Ch. 13; Secured Claims Read 203-25; work Problem Set 10.
8. Ch. 13: Unsecured Claims Read 229-47; work Problem Set 11 (skip 11.3).
9-10. Consumer Eligibility: "Means Testing" [NB: this assignment spanstwo class meetings] Read 251-77; work Problem Set 12 (skip 12.4), assuming today is TODAY, and all debtors live in Chicago, Cook County, IL. Find and apply the current income and expense figures at the UST website mentioned in the reading, for Problem 12.2, use Official Forms B122A-1 and B122A-2 to organize your analysis, and for Problem 12.5, skim Bushyhead.
20-21. Executory Contracts [NB: this assignment spanstwo class meetings] Read 561-73, 584-92, and § 365; work Problem Set 25 (skip 25.6) and Problems 26.1 and 26.3 (p. 592); read 843-50; work Problem 36.3.
22. Plan Confirmation Read 597-617, 623-35 and § 1129(a); work Problem Sets 27 and 28 (skip 27.4 and 28.4).