Thursday, February 2, 2017

Jerome Frank's argument for the absolute priority rule in bankruptcy

This is classic:

Courts of equity have a tradition of aiding the helpless, such as infants, idiots and drunkards.  The average security holder in a corporate reorganization is of like kind.

This comes from "Some Realistic Reflections on Some Aspects of Corporate Reorganization," 19 Virginia Law Review 541, 569 (1933).  (I owe the reference to a working paper by my colleagues Douglas Baird, Anthony Casey, and Randy Picker.)

Jurisprudence, Legal Humor | Permalink