Document Type
Article
Publication Title
ABI Law Review
Publication Date
1997
Volume
5
First Page
423
Abstract
(Excerpt)
Christmas 1997 has come and gone. Santa, in the form of the National Bankruptcy Review Commission, delivered lots of shiny new toys to the children of bankruptcyland. A few got only switches and lumps of coal, and all of the children wondered whether their new toys would really work.
Mary Megafirm had wanted only one thing from Santa. Over the years, she had grown bigger and bigger, and by now she had pretty much outgrown the old professional qualification rules. She had never much liked that nasty and bothersome "disinterestedness" standard, but in recent years the disinterestedness standard was making it harder and harder to play with her Megafirm relatives in the really fun mega-bankruptcies.
Santa received Mary's request very early and assigned several top elves to work on Mary's new toy. The elves threw the old disinterestedness rule on the rubbish heap, and built a lovely new rule that would allow Mary to play in all cases except those where she had a "materially adverse interest." The elves were very proud of the new toy, and some even thought that it was what the Ancestor Elves had actually meant to build back in 1978 when they originally put the disinterestedness rule together.
Unfortunately for Mary, all the commotion attracted a Grinch who did not understand why Mary needed a new rule. The Grinch asked all sorts of bothersome questions like: "Why can't Mary use the same rules by which the other bankruptcy children play?" If Mary's too big to fit into her old rule, then why doesn't she go on a diet?" and "[t]he bankruptcy playground must be kept cleaner than the other playgrounds; won't Mary's new rule let her roll in too much mud?"
When the elves could not give the Grinch satisfactory answers to those questions, the Grinch stole the new toy from Santa's bag of goodies. The elves were heartbroken. What were they going to give to Mary? With only a little time left before Christmas, they reluctantly retrieved the disinterestedness rule from the rubbish heap and dusted it off. They added a magic bell and a magic whistle to the rule and put it on the sleigh.
On Christmas morning, Mary rushed in to see what Santa had left under her tree. She was crushed. A little while later, she noticed the new bell and whistle. Curious, she rang the bell. Instantly her creditor status was magically transformed from a conflict into no conflict. Then she blew the whistle. Magically her equity security holder status was transformed from a conflict into no conflict. It was not the new rule that she wanted, but at least it was not a lump of coal.
Comments
Reprinted with permission of the American Bankruptcy Institute Law Review. Originally published at 5 AM. BANKR. INST. L. REV. 423 (1997).