I want to be in the room where it happens - giving voice to the weak and vulnerable in Chapter 11
Document Type
Essay
Publication Title
INSOL I-Read Student Newsletter
Publication Date
12-2025
Volume
Issue 21
Abstract
(Excerpt)
The focus of my contribution to this collection of essays on morality is the business restructuring aspect of insolvency law, specifically Chapter 11 of the United States Bankruptcy Code. Morality is a vague concept, but in this context, I adopt the view that it means consideration of others.
There does not appear to be much room for the consideration of others in corporate restructuring. But there also may not be much need. Most systems globally that permit restructuring are based on the English scheme of arrangement. The scheme is a very weak tool, with limited effect. Traditionally, a scheme would adjust the debt of a single class of creditors (usually bondholders) and would be based on a requisite majority of the class consenting to the scheme coupled with a judicial determination that the treatment of the dissenting class members satisfied a minimum standard of fairness. At its essence, a scheme merely achieves for the class of creditors an outcome beneficial to all class members by limiting the ability of individual class members to extort value by blocking the restructuring.
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