618 research outputs found

    Immigrant Visa Distribution: The Case of Mexico

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    Bankruptcy Abuse: An Empirical Study of Consumer Exemptions Cases

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    On April 20, 2005, the President of the United States signed a sweeping legislative overhaul of the consumer bankruptcy system. The bankruptcy reform legislation is based on an empirical assertion: that sophisticated debtors with the means to re-pay their debts were instead filing for bankruptcy and acquiring a discharge, thereby abusing the bankruptcy system. This Article presents the results of an empirical study of bankruptcy court doctrine in consumer exemptions proceedings over a twenty-year period. The findings suggest a serious empirical flaw in the premise of the bankruptcy reform legislation. The study shows that the bankruptcy system minimizes abuse by valuing property exemptions to decrease the amount of the discharge for sophisticated debtors and increase the amount of the discharge for unsophisticated debtors. The data show that the presence of sophistication reduces a debtor’s chance of success in an exemptions proceeding by as much as 87.8%. Courts systematically value exemptions to impose costs on the “can-pay” debtor. This pattern of abuse minimization emerged endogenously, without the prompting of hierarchical, exogenous forces such as Congressional or appellate court directives. These findings suggest that Congress has misunderstood the complex nature of the bankruptcy system, misdiagnosed the problem of consumer credit, and applied the wrong remedy. The Article concludes with a preliminary attempt to re-focus analysis of debt regulation around a “no-fault”

    Self-Organizing Legal Systems: Precedent and Variation in Bankruptcy

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    Models of legal ordering are frequently hierarchical. These models do not explain two prominent realities: (1) variation in the content of a legal system, and (2) patterns of non-hierarchical ordering that we observe. As a supplement to hierarchical explanations of legal order, this Article, drawing from physical and social science research on complex systems, offers a self-organizing model. The self-organizing model focuses on variation in the content of legal systems and attempts to explain the relationship between that variation and patterns of ordering. The self-organizing model demonstrates that variation and ordering are not opposite categories, but rather constitute one continuous phenomenon. Working with bankruptcy data and institutions, this Article describes self-organizing structures as overlapping networks of legal and extra-legal actors, and self-organizing dynamics as involving the twin processes of form innovation and norm emergence. This Article adduces empirical evidence (including a substantial case study and statistical analysis of a quantitative database) showing that bankruptcy is a self-organizing system. Finally, this Article suggests that self-organization may state a general theory of trial court behavior, and that the self-organizing model may illuminate legal research in areas such as discretion, doctrine, and legal change

    Patterns in a Complex System: An Empirical Study of Valuation in Business Bankruptcy Cases

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    This Article applies complex systems research methods to explore the characteristics of the bankruptcy legal system, presenting the results of an empirical study of twenty years of bankruptcy court valuation doctrine in business cramdown cases. These data provide solid descriptions of how courts exercise their discretion in valuing firms and assets. This Article accomplishes two objectives: First, using scientific methodology, this Article explains the content of bankruptcy valuation doctrine. Second, this Article uses doctrine as a variable to explore system dynamics that govern the processes of change over time. Significant findings include (i) courts tend to “split the difference” in valuations much less frequently than expected; (ii) parties’ valuation standards tend to be close together; (iii) bankruptcy courts’ valuation approach is substantially influenced by whether the valuation includes a calculation for the time value of money; (iv) there seems to be some geographic distribution of courts’ acceptance of valuation models, with Southern states more likely to accept “soft” valuation models, and non-Southern states more likely to accept “hard” valuation models; and (v) the evidence offers preliminary support for the hypothesis that bankruptcy system content may self-organize according to some complex deterministic dynamics
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