Date Posted: 2000
This essay reviews the book Rescuing Business: The Making of Corporate Bankruptcy Law in England and the United States, by Bruce G. Carruthers and Terence C. Halliday, and applies their lessons to the current bankruptcy reform debate.
Part I of the essay provides an overview and discussion of their book. The book is divided into three parts. The first part lays out their sociological model of legislative reform. The second part comprises an extended historical study of the various factors at work in the fashioning of the 1978 Bankruptcy Code. The third part studies the unique role played by bankruptcy professionals in the bankruptcy reform process. The essay commends them for their careful and voluminous historical research. Nonetheless, crippled by an unworkable and unpersuasive analytical model, they are unable to shed much light on the dynamics of bankruptcy reform. Flaccid appeals to equity are shown to be little more than covers for rent-seeking behavior by powerful interest groups. Saddled with their sociological model, they are unable to diagnose whether the pivotal role played by bankruptcy professionals exerts an overall positive or negative influence on the process of bankruptcy reform.
Armed with a more persuasive model of the legislative process, Part II of the essay applies the insights of Rescuing Business to understand the current bankruptcy reform process. In particular, the essay highlights the powerful role played by bankruptcy academics and professionals, and the power they exert over the process.