The Bankruptcy Partition

40 Pages Posted: 14 Feb 2018 Last revised: 23 Jun 2020

See all articles by Douglas G. Baird

Douglas G. Baird

University of Chicago Law School

Anthony J. Casey

University of Chicago Law School; ECGI

Randal C. Picker

University of Chicago - Law School

Date Written: January 5, 2018

Abstract

Many current bankruptcy debates—from critical vendor orders to the Supreme Court’s decision last year in Czyzewski v. Jevic Holding Corporation—begin with bankruptcy’s distributional rules and questions about how much discretion a judge should have in applying them. It is a mistake, however, to focus on distributional questions without first identifying the bankruptcy partition and ensuring it is properly policed. What appear to be distributional disputes are more often debates about the demarcation of the bankruptcy partition and the best way to police it.

Once the dynamics of establishing and policing the bankruptcy partition are taken into account, there is little room for departures from bankruptcy’s distributional rules. There might be a few rare cases in which maximizing the value of the estate requires it, but these inhabit an exceedingly narrow domain so small and so hard to navigate that they are sensibly handled with a per se rule that prohibits them.

Keywords: bankruptcy

Suggested Citation

Baird, Douglas G. and Casey, Anthony Joseph and Picker, Randal C., The Bankruptcy Partition (January 5, 2018). University of Chicago Coase-Sandor Institute for Law & Economics Research Paper No. 848, University of Pennsylvania Law Review, Vol. 166, 2018, Available at SSRN: https://ssrn.com/abstract=3110210 or http://dx.doi.org/10.2139/ssrn.3110210

Douglas G. Baird

University of Chicago Law School ( email )

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Anthony Joseph Casey (Contact Author)

University of Chicago Law School ( email )

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HOME PAGE: http://www.law.uchicago.edu/faculty/casey

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Randal C. Picker

University of Chicago - Law School ( email )

1111 E. 60th St.
Chicago, IL 60637
United States
773-702-0864 (Phone)

HOME PAGE: http://www.law.uchicago.edu/Picker/

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