Research Professor Matthew Bruckner’s latest paper, The Virtue in Bankruptcy, was accepted for publication in the Loyola University Chicago Law Journal. Here is the abstract:
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 Congress’ decision to privilege decision-making criteria other than economic efficiency. By contrast, virtue ethics can offer insights about corporate bankruptcy law’s most salient features for at least three reasons. First, bankruptcy courts appear to give content to bankruptcy laws by using virtue ethical principles. Virtue ethics’ decision-making process — practical wisdom — can provide insights into how bankruptcy judges balance concerns about, among other things, 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.
A current version of the paper is available on SSRN (here).