Sky Blog
While the distressed debt market continues to be extraordinarily active, Chapter 11 activity has remained at a relatively steady level compared to recent years. The high costs of Chapter 11, together with stakeholder incentives to “kick the can” when possible, …
The capture of Nicolás Maduro by U.S. forces in the early morning hours of January 3, 2026 produced dramatic headlines, but a key question is whether his removal significantly affects the dynamics that have underpinned Venezuela’s long‑running crises. The reality …
In an article published in 2007, two lawyers from our firm predicted that “the validity and application of prepayment clauses will continue to be the source of bankruptcy litigation, especially in low interest rate environments.”[1] How true that was. …
Out-of-court corporate restructurings, or “corporate workouts,” involve high-stakes multi-party negotiations without a clear procedural framework, such as the one that Chapter 11 provides. This gives the parties the freedom to design workouts without the constraints imposed by a rigid legal …
The dominant shareholder primacy model of corporate governance makes shareholder wealth maximization both the purpose of a corporation and the only legitimate consideration for decisions by corporate directors. Yet that single-stakeholder model is under attack on several fronts. Numerous scholars …
Chapter 11 was widely seen as a failure in the first decade of the Bankruptcy Code’s operation, the 1980s. Large firms were mired in bankruptcy for years; the process was seen as expensive, inaccurate, and subject to abuse. While basic …
One of the primary challenges faced by the courts after a firm files for bankruptcy is estimating the continuation value of the reorganized firm. Often there are large errors in these estimates, which raise significant concerns about the efficiency of …
The New York State Legislature is again considering a proposed law with potential implications for sovereign debt. Entitled the “Sovereign Debt Stability Act,” it combines two previous legislative proposals from the 2023 legislative session.[1] Those proposals sought to: (i) …
The proliferation of bankruptcy directors represents a controversial shift in the corporate governance landscape. Independent directors appointed when a company experiences financial distress (known colloquially as “bankruptcy directors”) bring restructuring expertise and experience to a high-stakes situation. Their appointment also …
In recent years, many countries have adopted some form of pre-packaged reorganizations (“pre-packs”), inspired largely by pre-packs popularized in the United Kingdom and the United States. By shortening insolvency proceedings, pre-packs can reduce the costs of financial distress and especially …
In a memorandum opinion and order issued on March 27, 2024, in In re Yellow Corporation, et. al., Judge Craig T. Goldblatt denied motions filed by multiemployer pension funds to arbitrate debtors’ objections to pension withdrawal liability claims in …
In the past few years, bankruptcy has emerged as a popular tool for resolving mass-tort litigation. Academics have largely greeted this development with skepticism and alarm, arguing that large corporations turn to bankruptcy to reduce expected payouts at the expense …
From 2011 to 2019, the number of bank charters fell by nearly one-third, from 7,357 to 5,177, with community banks accounting for three-quarters of this decline (FDIC Community Bank Report, 2020) In a new paper, we presents compelling …
Traditionally, senior lenders have wielded all the control in bankruptcy and out-of-court restructurings. They usually hold liens on all or substantially all the debtor’s assets and enjoy payment priority over virtually all other claimants. Meanwhile, modern debt instruments often contain …
In a new article, I observe that an accurate understanding of intersecting bodies of law can sometimes turn on the scale of observation. In particular, I examine how the intersection of commercial and bankruptcy law creates uncertainty whether a transfer …
In a recent paper, we make the case for a smart contract-based automated restructuring framework that can be used by any firm that issues equity and debt securities in tokenized form. The paper is the basis for an actual smart-contract …
In a recent article, we propose a new rule for determining the proper forum for insolvency proceedings. Currently, the Model Law on Cross-Border Insolvency, promulgated by the United Nations Commission on International Trade Law (“UNCITRAL”), looks to a debtor’s center …
In recent years, Chapter 11 of the Bankruptcy Code has prompted critics to claim that, at least when it comes to large companies, it has become a lawless forum where bankruptcy judges have jettisoned fealty to the code in order …
The bankruptcy system has long been the last, best hope for firms seeking to resolve overwhelming mass-tort liabilities. The seminal case, Manville, resolved legacy asbestos liabilities through debtor and third-party funding of a claimant trust and an order channeling all …
Loophole seeking has become a standard tool in the world of distressed debt restructuring. The highest-profile example was the J. Crew restructuring in 2016. In that transaction, the company stripped $250 million in trademark collateral from the reach of its …