Car wars: valuation standards in Chapter 13 bankruptcy cases

Article Abstract:

Liquidation or wholesale value is more appropriate for valuation in Chapter 13 bankruptcy reorganizations, although the trend has been to use going concern or retail value instead. The use of liquidation value is supported by both valuation theory and a holistic intepretation of the Bankruptcy Code in Chapter 13 cases, which usually involve valuation of automobiles. Bankruptcy Code section 506(a) does not determine the standard of valuation, as has been alleged. Moreover, valuation should be treated as an issue of fact.

Motor vehicles and car bodies, Automobiles, Automobile Manufacturing, Valuation, Liquidation, Bankruptcy reorganizations, Bankruptcy reorganization

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Rake's progress: cure and reinstatement of secured claims in bankruptcy reorganization

Article Abstract:

Neither the US Supreme Court 1993 decision in Rake v. Wade nor 1994 amendments to the Bankruptcy Code create an effective theory of cure in reinstatement of security agreements. The Supreme Court emphasized Bankruptcy Code sections 506(b) and 1325(a)(5) in its decision, which considered oversecured but not undersecured creditors. Congress applied contract concepts to the theory of cure. An effective theory of cure would be compensatory, or tort driven, and include calculations of market rate interest in cure price.

Secured transactions

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Preserving the benefit of the bargain: the equitable result

Article Abstract:

Bankruptcy Court decisions in NCL Corp. v. Lone Star Centers (Eastern), Inc. and Georgia Ports Authority v. Diamond Manufacturing Co. undermine the cure requirements outlined in 11 U.S.C. section 365. Section 365 ensures creditors will receive performance of executory contracts. The decisions allow debtors to evade responsibility by claiming contingent claims are not valid. The decisions also damage cure requirements in unexpired leases.

Remedies, Breach of contract

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