Introduction


SURVEY

ACTIVISM, UNCERTAINTY, AND ABUSE:
CURRENT ISSUES IN BANKRUPTCY LAW

The United States has recently witnessed some of the
largest corporate bankruptcy filings in history. Accordingly,
because bankruptcy touches so many facets of business law,
we have decided to devote the Columbia Business Law
Review's fourth annual survey of law to some key discussions
in the current bankruptcy landscape.

The survey's first piece, Cracking the Code: The Legal
Authority Behind Extrastatutory Debtor-in-Possession
Financing Mechanisms and Their Prospects for Survival,
explores the use of three bankruptcy financing practices that
have become common despite their lack of explicit sanction
by the text of the Bankruptcy Code. Specifically, the piece
discusses the legal and normative validity of cross-
collateralization, critical vendor orders, and restrictive loan
covenants that grant lenders control over a debtor's
governance, as well as judicial efforts to curtail the use of
those practices.

The second piece of the survey focuses on the issue of
financial valuation in bankruptcy. Valuation Uncertainty in
Chapter 11 Reorganizations examines various valuation
disputes that arise in the context of reorganization plan
confirmation and cramdown, explaining how and why such
disputes occur and analyzing potential methods of resolving
the problems caused by valuation uncertainty.

The final piece of the survey, Responding to Threats of
Bankruptcy Abuse in a Post-Enron World: Entrusting the
Bankruptcy Judge as the Guardian of Debtor Estate,
addresses the trend of sales, as opposed to reorganizations,
during Chapter 11 bankruptcies. The paper provides a
summary of different methods and tools used for conducting
bankruptcy sales both inside and outside of reorganization
plans. It also outlines the provisions of the Bankruptcy Code



COLUMBIA BUSINESS LAW RE WE W [Vol. 2005

that empower and guide courts in their management of
bankruptcy sales and discusses the tendency of bankruptcy
judges to favor general guiding principles over bright-line
rules in an effort to preserve their equitable discretion and
maximize the value of the bankruptcy estate.

We hope you find the information in this survey helpful,
and we welcome your comments or suggestions.

Craig R. Bucki
Kerry O'Rourke
Rachael M. Jackson
Survey Authors

Joshua M. Koenig
Survey Editor

COLUMBIA BUSINESS LA W REVIEW [Vol. 2005