Another One Bites the Dust: How Jevic Curtailed Creditor Rights to Negotiate in and out of Bankruptcy

Authors

Jaden Banks

Abstract

Gone are the days of bankruptcy where the insolvent debtor faced an ignominious execution or was sentenced to lifelong imprisonment to satisfy a creditor's demand for their pound of flesh. The modern U.S. Bankruptcy System has moved beyond its focus on draconian punishment, instead, its focus is on fairness to the debtor and distribution of assets among creditors. With recent Supreme Court cases such as Jevic, significant concerns have been raised about the effectiveness of negotiated agreements, related to, but outside of bankruptcy. These concerns center on the reduction in the fairness of certain debtor tools namely prepackaged and cramdown plans. These plans put creditors in a constantly inferior bargaining position to the debtor, with whom, creditors must negotiate to obtain payment of outstanding obligations. ln contravention of historic fears about bankruptcy's fairness and efficiency, this article addresses a growing concern regarding the treatment of creditors in a debtor-oriented system. This article posits that Jevic has detrimentally altered creditor interests in insolvency and bankruptcy because creditors have been severely limited in their ability to negotiate for preferential payment.

Recommended Citation

Jaden Banks, Another One Bites the Dust: How Jevic Curtailed Creditor Rights to Negotiate in and out of Bankruptcy, 2021 J. Disp. Resol. (2021)
Available at: https://scholarship.law.missouri.edu/jdr/vol2021/iss1/8