Business Law News 6 - College of Law

Winship authors post on suits against private companies brought by shareholders

Professor Verity Winship teaches a class.

In a new blog post published on the Harvard Law School Forum on Corporate Governance, Professor Verity Winship examines a “blindspot in the law and its analysis”: suits brought by investors against the company in which they own shares. Reviewing literature on “unicorn” companies, private companies valued over $1 billion, Winship discovered a few interesting and unique aspects of shareholder suits against these groups. She found such cases are rare and predominantly based on state-law claims, and their rarity may be due to procedural limitations, investment structures, and the absence of market prices, necessitating a new approach to align regulatory frameworks with the realities of modern private companies.

Lawless and Robbennolt: Purdue Pharma, Bankruptcy, and Procedural Justice

Professors Bob Lawless and Jennifer Robbennolt co-authored a blog post for Psychology Today, titled “Purdue Pharma, Bankruptcy, and Procedural Justice.” In the post, they discuss how the Sackler family sought a release in the Purdue Pharma bankruptcy case that would protect them from facing opioid lawsuits, despite not having declared bankruptcy themselves. Many claimants were opposed to a settlement plan and wanted to face the Sacklers in court. The authors argue that psychologists should explore concerns for procedural justice when tort cases are resolved through bankruptcy.

Read the full post.

Kaplan files amicus brief in Fifth Circuit retirement investing case

Professor Richard Kaplan was one of six law professors who filed an amicus curiae brief in the U.S. Court of Appeals, Fifth Circuit case State of Utah et al. v. Julie Su et al. The brief was filed in support of a Biden administration rule allowing retirement advisers to consider environmental, social and governance issues when making decisions for clients, with the professors arguing the move aligns with fiduciary duties to minimize risks and maximize returns for clients. The brief also urged the appeals court to reject a Utah-fronted challenge that argues the rule is inconsistent with the Employee Retirement Income Security Act and investment professionals’ obligations.

Read coverage of the case from Law360 and Bloomberg.

Delaware Bankrupcty Court relies on scholarship from Lawless in opinion

In the U.S. Bankruptcy Court for the District of Delaware, Judge Craig T. Goldblatt relied heavily upon the scholarship of Professor Robert Lawless in his opinion for Yellow Corporation’s Chapter 11 plan. Citing “Reframing Arbitration & Bankruptcy,” Judge Goldblatt ruled that Yellow Corp. must resolve issues in bankruptcy court rather than in arbitration. Speaking to the American Bankruptcy Institution about the decision, Lawless explained “Judge Goldblatt cut through the rhetoric and got it right.”

Read the Bankruptcy Court opinion online.
Read the American Bankruptcy Institute’s examination of the ruling.

Brubaker talks Bayer, Texas Two-Step bankruptcy with Bloomberg

Professor Brubaker speaks during a live podcast recording at the College of Law

Bayer AG is considering employing the controversial legal tactic known as the Texas Two-Step bankruptcy to address the thousands of lawsuits alleging that its Roundup weedkiller causes cancer. The strategy, which involves splitting assets and liabilities into separate units, with the unit burdened by liabilities being placed into bankruptcy to facilitate a global settlement, is an area of expertise for Professor Ralph Brubaker. Speaking to Bloomberg, he suggested that although the courts may ultimately refuse this tactic, bankruptcy could provide Bayer with time to propose a settlement while halting ongoing litigation.

Read the full Bloomberg article online.

Law360 quotes Brubaker on mass tort claims and nondebtor parties

The sun rises over the Illini Union. The Illini Union, which was dedicated in 1941, serves students and the campus in many ways, including housing the Illini Union Hotel, a credit union, a convenience store, information services, CITES (Campus IT) instructional facility, quick-service restaurants, a bowling alley and arcade, student performance spaces, and office space for Registered Student Organizations, student government, Student Legal Services, Student Tenant Union, LGBT Resource Center, and Union administration.

A recent $2.5 billion bankruptcy settlement between the Boy Scouts of America and childhood sexual abuse survivors seemed to put a close to an awful chapter in the victims lives, until the settlement was halted by the U.S. Supreme Court due to concerns over the legality of mandatory releases of claims against nondebtor third parties. Writing about the settlement, Law360 highlights broader debates about the fairness of handling mass-tort claims in bankruptcy courts, where settlements may favor one side over the other and quotes Professor Ralph Brubaker, and expert in this area. The article explores the history of such releases, their impact on mass-tort litigation, and ongoing legal disputes over their validity.

Read the full article from Law360.

U.S. Bankruptcy Court cites Brubaker in decision denying dismissal of asbestos case

Fall view of Illini Union from north of Green Street.

The United States Bankruptcy Court Western District of North Carolina recently denied a motion to dismiss the bankruptcy of companies implicated in asbestos liability cases, citing and quoting from several articles by Professor Ralph Brubaker. The case involves Texas Two-Step mass-tort bankruptcy, a topic in which Brubaker has researched and published extensively. The decision cites to and quotes from “On the Nature of Federal Bankruptcy Jurisdiction: A General Statutory and Constitutional Theory,” from the William & Mary Legal Review; “Explaining Katz’s New Bankruptcy Exception to State Sovereign Immunity: The Bankruptcy Power as a Federal Forum Power,” from the American Bankruptcy Institute Legal Review; and “The Texas Two-Step and Mandatory Non-Opt-Out Settlement Powers,” in the Harvard Law School Bankruptcy Roundtable.

Read the decision online.

Brubaker receives Lawrence P. King Award from Commercial Law League of America

Professor Ralph Brubaker has received the Lawrence P. King Award for Excellence in the Field of Bankruptcy by the Commercial Law League of America. Below is the text of the press release announcing the award.

Commercial Law League of America Announces 2024 Lawrence P. King Award Recipient

Rolling Meadows, IL, February 29, 2024 – The Commercial Law League of America (CLLA) and its Bankruptcy Section are pleased to announce that they will present the Lawrence P. King Award to Ralph Brubaker at the National Conference of Bankruptcy Judges (NCBJ) in Seattle, WA on September 19, 2024.

The King Award: Each year, the Executive Council of the Commercial Law League’s Bankruptcy Section presents the Lawrence P. King Award to recognize a lawyer, judge, teacher, or legislator who exemplifies the best in scholarship, advocacy, judicial administration, or legislative activities in the field of bankruptcy. The award is designed to recognize the lifetime achievements of Professor King, which include contributing to the practice of bankruptcy law through teaching, by working to elevate the profession and through bankruptcy-related legislative activities.

This year’s recipient — Ralph Brubaker — is the James H.M. Sprayregen Professor of Law at the University of Illinois, where he teaches courses in bankruptcy, bankruptcy procedure, corporate reorganizations, federal courts, conflict of laws (private international law), contracts, and restitution. Professor Brubaker has three degrees from the University of Illinois, including his J.D. summa cum laude and an M.B.A., and he received Bronze Tablet distinction (highest honors) and C.P.A. certification as an undergraduate. He clerked for Judge James K. Logan of the United States Court of Appeals for the Tenth Circuit, and he practiced in the bankruptcy and corporate reorganization group with the law firm Squire, Sanders & Dempsey (now Squire Patton Boggs) in Cleveland, Ohio. Professor Brubaker was a member of the faculty at the Emory University School of Law in Atlanta, Georgia from 1995 until 2004, when he returned to his alma mater.

Professor Brubaker is the Editor-in-Chief and a contributing author for West’s Bankruptcy Law Letter, he is co-author of a bankruptcy casebook, and he has written dozens of journal articles and essays. He is particularly expert in the complex jurisdictional and procedural facets of federal bankruptcy proceedings. Professor Brubaker has been an editorial advisor for the American Bankruptcy Law Journal, the American Bankruptcy Institute Law Review, and the Emory Bankruptcy Developments Journal. He is a member of the American Law Institute, a Conferee of the National Bankruptcy Conference, and a Fellow of the American College of Bankruptcy, for which he has been the Scholar-in-Residence.

Professor Brubaker has served on the executive committee of the board of directors of the American Bankruptcy Institute (ABI), and he was a member of the advisory committee on business enterprise sales for the ABI’s 2014 Commission to Study the Reform of Chapter 11.

Lawless quoted by ABC on financial penalties imposed upon former President Trump

Judge Arthur Engoron dealt a significant legal and financial blow to former President Donald Trump’s business empire, including a staggering $355 million fine and temporary removal of Trump and his sons from business leadership roles. Professor Robert Lawless, speaking to ABC News, explained what may happen to Trump and his businesses if his appeal fails to limit the fines imposed by Engoron, including limited access to capital, increased oversight, and the possibility of forced asset sales. Trump’s ongoing legal battles, including the recent civil suit payout to E. Jean Carroll, could exacerbate his financial difficulties, with bankruptcy offering little respite due to the non-dischargeable nature of legal fines.

Read the full article on the ABC News website.

Illinois Senators name N. Sharpe to screening committee

Professor Nicola Sharpe is one of five individuals selected to be part of a screening committee whose task is to review and vet District Court candidates and advise regarding the candidates’ qualifications and fitness for the position. The committee was selected by U.S. Senate Majority Whip Dick Durbin, Chair of the Senate Judiciary Committee, and U.S. Senator Tammy Duckworth to fill vacancy in the Federal District Court Judge in the Central District of Illinois. “Our constitutional responsibility to advise and consent is one of the most important duties we have in the Senate. As we make recommendations for lifetime judicial appointments, we will benefit from the guidance and insights of our distinguished screening committee,” the Senators said in a press release. The committee also features University of Illinois College of Law alumni Hon. Glenn Collier (ret.) and Donald Jackson.

Read the full press release online.