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The Creditor in Possession

A hallmark of United States bankruptcy law has been the principle that a debtor should be provided with an opportunity to use the bankruptcy to get a "fresh start." That principle, initially applicable to individuals, was carried forward as an underlying premise of business reorganizations and coupled with the belief that reorganizations preserved going concern values. The value of reorganization as compared with liquidation in cases of major business failures was first realized in connection with the reorganization of railroads during the latter part of the 19th century that continued into the 20th century. In the context of the current economic environment, the underlying premise of railroad reorganizations of preserving going concern value may no longer be viable.

12 minute read November 01, 2003 at 07:23 AM
By
Harvey R. Miller And Shai Y. Waisman
The Creditor in Possession

A hallmark of United States bankruptcy law has been the principle that a debtor should be provided with an opportunity to use the bankruptcy to get a “fresh start.”

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