Bill on Bankruptcy: Easterbrook Turns the Tide on Student Loans
April 18 (Bloomberg) — Why and when U.S.-managed hedge funds can go bankrupt in the Caribbean, not in the U.S., is the first item discussed on the new bankruptcy video with Bloomberg Law’s Lee Pacchia and Bloomberg News bankruptcy columnist Bill Rochelle.
On the subject of the so-called bankruptcy safe harbor for stock dealings, Rochelle explains why U.S. District Judge Jed Rakoff found a loophole putting no limits on suits against customers of Bernard L. Madoff Investment Securities Inc. who knew there was fraud afoot.
On the subject of loopholes, the reorganization of American Airlines Inc. allowed a bankruptcy judge to suggest there can be a way to avoid the Congressional prohibition of retention bonuses and severance pay for senior officers of companies in Chapter 11.
The video ends with discussion of an opinion by U.S. Circuit Judge Frank Easterbrook who’s turning the tide against recent decisions leaving former students virtually incapable of shedding education loans in bankruptcy.