Business Law News 8 - College of Law

Lawless critical of judge shopping in Wall Street Journal article on WeWork bankruptcy

WeWork’s recent Chapter 11 filing in New Jersey is the seventh large bankruptcy filing in the state since the previous November, as corporations increasingly choose the state as the destination to restructure their debt. New Jersey’s share of large bankruptcies nationwide has risen to 5%, partly due to the stability provided by consistent judges in New Jersey and partly due to rulings attractive to corporations. Professor Robert Lawless told the Wall Street Journal changes may be needed to address the perception that companies can freely choose where to file their bankruptcy petitions. “I can understand the reasons why companies are going to New Jersey, but I still think this rampant forum shopping undermines confidence in the courts,” he said. “Something needs to be done.”

Read the full article from the Wall Street Journal.

Lawless and Brubaker sign letter urging abolition of Texas bankruptcy court panel

A dozen academics, including Professors Ralph Brubaker and Robert Lawless, are urging the United States Bankruptcy Court to abolish the two-judge panel on a south Texas bankruptcy court that has earned a reputation as a key venue for large bankruptcy cases. The letter from the legal scholars to Chief Judge Eduardo V. Rodriguez comes as a result of media reports about undisclosed relationships between Judge David R. Jones and parties that appeared in his Texas bankruptcy court. Jones was the chief judge who created the two-judge panel to oversee complex cases, which was established in part because of “judge shopping” by companies within Texas’s jurisdiction. The two-judge panel became a target for the same practices, however, leading to “controversy and criticism for undermining public confidence in the chapter 11 system,” as the letter to Judge Rodriguez states.

Read the full letter to Judge Rodriguez urging the abolition of the Texas two-judge panel system.

Read a Law360 article quoting Professor Lawless about the controversy in the Texas court.

Lawless speaks to Philadelphia Inquirer about bankruptcy protection and student loans

When student loan payments resumed in October, an op-ed in the Philadelphia Inquirer proposed a solution to help debtors: Restore bankruptcy rights to student loans. To make his case, the author of the piece spoke to bankruptcy expert Professor Robert Lawless about the history of bankruptcy protection for student loans. Lawless explained that although federal student loans are not currently permitted in bankruptcy filings, legislation that restores these rights would not contravene existing law.

“Any law passed by both houses of Congress and signed by the president can amend the Bankruptcy Code,” said Lawless.

Read the full article.

Lawless quoted in Reuters series on lasting effects of slavery

In their series on how the effects of slavery remain with us today, Reuters spoke to Professor Robert Lawless about the history of bankruptcy. The series, titled “Slavery’s Descendants” examines how slavery, the Jim Crow era, and racial discrimination put two different families (one white, one black) on very different economic paths. For part four, “American Dreams,” Lawless provides his expertise to explain racial discrepancies in bankruptcy cases, which have tended to have worse outcomes for Black debtors than for white debtors.

Read the full article on Reuters’ website.

Lawless quoted in article on Shelby County bankruptcies

In the past year, Shelby County, Tennessee, has a record of six bankruptcies per 1,000 residents, a rate that tops the nation. With none of the other 100 largest counties in the United States having more than four per 1,000, the difference is not particularly close, either. In their investigation of this phenomenon, MLK50: Justice Through Journalism, a nonprofit Memphis newsroom, quoted Professor Robert Lawless. “(Shelby County) is a tremendous outlier,” said Lawless. “It’s hard to think of a reason why (that is) except for legal practice.… I have no question that there are attorneys in Memphis doing the right things by their client.… And I have no question that there are attorneys in Memphis that are taking advantage of people.”

Read the full article on the MLK50 site.

Brubaker submits amicus brief in Purdue Pharma case

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.

In the case of Harrington v. Purdue Pharma, pending before the U.S. Supreme Court, Professor Ralph Brubaker has submitted an amicus brief arguing “Courts have no power to approve” the bankruptcy plan submitted by Purdue Pharma. Joined in writing the brief by fellow bankruptcy experts Professor Bruce Markell of Northwestern and Professor Jonathan Seymour of Duke, Brubaker and his co-amici assert that approval of the Chapter 11 bankruptcy plan from Purdue Pharma is not permissible under established law and would represent a violation of claimants’ due-process rights. The brief suggests that the Court should repudiate the discharge plan in order to “put an end to the abusive ‘bankruptcy grifting’ that this case vividly illustrates.”

Read the full amicus brief here.

Robbennolt and Winship author perception of settlement article for APA

Fall view of Illini Union from north of Green Street.

Though the record-breaking settlement Dominion received in its settlement with Fox News is frequently characterized as a “win” by commentators, the statement from Fox with the settlement was not apologetic, did not acknowledge any responsibility, and was not a retraction. In a new article written for the American Psychological Association, Professors Jennifer Robbennolt and Verity Winship, along with Jessica Bregant ’09 (now a professor at the University of Houston Law Center), dig into the psychological reasons people tend to infer that a settling defendant was responsible. Based on their research on settlements, the article provides a fascinating look at how perceptions can affect how lawsuits are settled.

Read the full article online.

USA Today quotes Brubaker on Rite Aid bankruptcy

In an attempt to restructure its more than $3 billion in debt and confront lawsuits alleging the company filled opioid prescriptions unlawfully, Rite Aid is reportedly preparing to file bankruptcy. In an article examining the company’s motivations for doing so and the potential ramifications of their bankruptcy, USA Today quoted Professor Ralph Brubaker, an expert in bankruptcy law. In his comments, Brubaker explained that customers would see almost no change should the retail chain declare Chapter 11 bankruptcy, but cited the example of Johnson & Johnson as how Rite Aid might not succeed in their efforts to limit liability.

Read the full article from USA Today.

Brubaker writes about Purdue Pharma’s appeal for Creditor Rights Coalition

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

As part of Creditor Rights Coalition’s “The Academics Speak Up” series, Professor Ralph Brubaker shared his thoughts on Purdue Pharma’s appeal to the U.S. Supreme Court in its bankruptcy proceedings. Brubaker made clear his feelings about the mechanisms by which Purdue was trying to discharge its debts in a direct and unsparing critique. “I am grateful for the tenacity of the U.S. Trustee and DOJ in calling out the utter impropriety of nondebtor-discharge practice, which has tainted the bankruptcy system and incited public outrage,” he wrote.

Read his full editorial online.

Kaplan discusses Medicare’s announcement of impending prescription drug price negotiations on Chicago radio show

Professor Richard Kaplan was a guest on the September 1 episode of Joan Esposito’s radio show on WCPT Chicago. He discussed Medicare’s announcement of impending price negotiations for ten widely used prescription drugs pursuant to a provision in the Inflation Reduction Act of 2022.