Congress has effectively precluded all institutions of higher education from reorganizing in the ... more Congress has effectively precluded all institutions of higher education from reorganizing in the bankruptcy courts because it was concerned about exploitative profiteers opening fly-by-night colleges, defrauding students, and then finding refuge in bankruptcy. This choice harms students, employees, creditors, and communities. As such, this Article advocates that Congress should reverse its decision and allow IHEs to reorganize in bankruptcy without losing access to federal student loan and grant programs. To support this argument, this Article contrasts the bankruptcy treatment of healthcare enterprises to that of higher education enterprises. In doing so, this Article builds on my own prior work and contributes to the literature on higher education bankruptcies.
Many institutions of higher education are struggling financially and would benefit from the use o... more Many institutions of higher education are struggling financially and would benefit from the use of bankruptcy reorganization tools designed to enable struggling enterprises to restore themselves to a state of financial viability. This essential set of tools for responding to financial distress is available only in bankruptcy reorganizations and Congress has effectively precluded colleges and universities from having access to them. This Article argues that this is a mistake and is premised upon an outdated and unsupported premise. It contributes to the nascent literature on higher education bankruptcy proceedings by examining how differences among the three primary organizational structures of institutions of higher education affect whether and under what circumstances institutions of higher education should be allowed to reorganize through bankruptcy. This Article argues that the profound differences in how colleges are organized greatly affect whether bankruptcy reorganization is appropriate for each type of institution. It concludes that for-profit colleges are most likely to benefit from access to bankruptcy reorganization, public colleges would likely benefit least from having bankruptcy reorganization available, and the myriad far-reaching benefits of granting all institutions of higher education the right to reorganize under the bankruptcy law far outweighs any potential risks.
In response to a gap in the corporate bankruptcy literature, this Article offers a new positive t... more In response to a gap in the corporate bankruptcy literature, this Article offers a new positive theory of corporate bankruptcy law based on virtue ethics. The dominant theory of corporate bankruptcy law—the creditors' bargain model—is necessarily incomplete because it does not account for bankruptcy courts' equitable and discretionary powers, or for bankruptcy courts' need to consider decision-making criteria other than economic efficiency. By contrast, virtue ethics offers insights about these features of corporate bankruptcy law for at least three reasons. First, bankruptcy courts appear to give content to bankruptcy laws by using virtue ethical principles. Second, virtue ethics' decision-making process—practical wisdom—provides insights into how bankruptcy judges balance concerns about efficiency, justice, and fairness when reaching decisions. This is particularly true when the bankruptcy court's equitable jurisdiction or discretionary powers are implicated. Third, virtue ethics' symbiotic consideration of means and ends parallels the process bankruptcy judges are called on to use when exercising their discretionary or equitable powers under numerous provisions of the Bankruptcy Code.
Many institutions of higher education are in dire financial straits and will close, merge, or fil... more Many institutions of higher education are in dire financial straits and will close, merge, or file for bankruptcy in the near future. This Article considers the effect of bankruptcy laws on the ability of higher education institutions to restructure their workforces and, in particular, the impact that a bankruptcy filing may have on tenured professors. It also addresses how some tenured professors may be able to complicate their employer's reorganization to their own strategic advantage.
Congress has effectively precluded all institutions of higher education from reorganizing in the ... more Congress has effectively precluded all institutions of higher education from reorganizing in the bankruptcy courts because it was concerned about exploitative profiteers opening fly-by-night colleges, defrauding students, and then finding refuge in bankruptcy. This choice harms students, employees, creditors, and communities. As such, this Article advocates that Congress should reverse its decision and allow IHEs to reorganize in bankruptcy without losing access to federal student loan and grant programs. To support this argument, this Article contrasts the bankruptcy treatment of healthcare enterprises to that of higher education enterprises. In doing so, this Article builds on my own prior work and contributes to the literature on higher education bankruptcies.
Many institutions of higher education are struggling financially and would benefit from the use o... more Many institutions of higher education are struggling financially and would benefit from the use of bankruptcy reorganization tools designed to enable struggling enterprises to restore themselves to a state of financial viability. This essential set of tools for responding to financial distress is available only in bankruptcy reorganizations and Congress has effectively precluded colleges and universities from having access to them. This Article argues that this is a mistake and is premised upon an outdated and unsupported premise. It contributes to the nascent literature on higher education bankruptcy proceedings by examining how differences among the three primary organizational structures of institutions of higher education affect whether and under what circumstances institutions of higher education should be allowed to reorganize through bankruptcy. This Article argues that the profound differences in how colleges are organized greatly affect whether bankruptcy reorganization is appropriate for each type of institution. It concludes that for-profit colleges are most likely to benefit from access to bankruptcy reorganization, public colleges would likely benefit least from having bankruptcy reorganization available, and the myriad far-reaching benefits of granting all institutions of higher education the right to reorganize under the bankruptcy law far outweighs any potential risks.
In response to a gap in the corporate bankruptcy literature, this Article offers a new positive t... more In response to a gap in the corporate bankruptcy literature, this Article offers a new positive theory of corporate bankruptcy law based on virtue ethics. The dominant theory of corporate bankruptcy law—the creditors' bargain model—is necessarily incomplete because it does not account for bankruptcy courts' equitable and discretionary powers, or for bankruptcy courts' need to consider decision-making criteria other than economic efficiency. By contrast, virtue ethics offers insights about these features of corporate bankruptcy law for at least three reasons. First, bankruptcy courts appear to give content to bankruptcy laws by using virtue ethical principles. Second, virtue ethics' decision-making process—practical wisdom—provides insights into how bankruptcy judges balance concerns about efficiency, justice, and fairness when reaching decisions. This is particularly true when the bankruptcy court's equitable jurisdiction or discretionary powers are implicated. Third, virtue ethics' symbiotic consideration of means and ends parallels the process bankruptcy judges are called on to use when exercising their discretionary or equitable powers under numerous provisions of the Bankruptcy Code.
Many institutions of higher education are in dire financial straits and will close, merge, or fil... more Many institutions of higher education are in dire financial straits and will close, merge, or file for bankruptcy in the near future. This Article considers the effect of bankruptcy laws on the ability of higher education institutions to restructure their workforces and, in particular, the impact that a bankruptcy filing may have on tenured professors. It also addresses how some tenured professors may be able to complicate their employer's reorganization to their own strategic advantage.
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Papers by Matthew A Bruckner