The Yale Law Journal

Forum Collection

Bankruptcy and Restructuring in Response to Exogenous Shocks

10 Nov 2021

This Collection explores the impact of exogenous shocks on corporate restructurings and bankruptcies. These Essays analyze trends in restructuring practices and policy making, and they carefully consider the relationship between market forces and the Bankruptcy Code in achieving efficient restructuring outcomes that benefit a variety of stakeholders.


Pandemic Hope for Chapter 11 Financing

David Skeel

The pandemic revealed that the increasing complexity of debtors’ capital structure could supply much-needed competition in the Chapter 11 financing market, as other inside lenders increasingly challenge a debtor’s favored inside lenders. After discussing the benefits of this surprising development, …


COVID-19 Debt and Bankruptcy Infrastructure

Robert K. Rasmussen

The COVID induced debt spike on corporate balance sheets portends a wave of future bankruptcy cases. Congress should act now to build up a bankruptcy infrastructure by requiring that every circuit create a “business bankruptcy panel” designed to administer the Chapter 11 filing of large companies. R…


J. Crew, Nine West, and the Complexities of Financial Distress

Kenneth Ayotte & Christina Scully

The law-and-economics literature assumes that omnisciently rational “sophisticated parties” write optimal contracts, making bankruptcy law unnecessary. Two case studies, J. Crew and Nine West, illustrate the limitations of this idealized model. We argue for a theory of debt contracting based in boun…


Small Business Disaster Relief and Restructuring

Brook E. Gotberg

To assist small businesses in the wake of an exogenous shock, Congress should consider implementing a system of lending that models the financing provided to small business debtors in a bankruptcy proceeding. Such a system would be more targeted, effective, and fair than traditional government loans…


Shocking Business Bankruptcy Law

Melissa B. Jacoby

The intersection of major crises and financial distress generates no shortage of stock stories. This Essay offers one more: how shocks can be used opportunistically in big Chapter 11 cases to unravel bankruptcy law, and to shift the system further away from the objective of responding to overindebte…