Abstract: On April 30, 2013, the U.S. Court of Appeals for the Ninth Circuit in In re Fitness Holdings International, Inc. held that bankruptcy courts have the authority to recharacterize debt as equity when the obligation does not constitute a “right to payment” under state law. In so holding, the court adhered to a state law approach and declined to adopt a federal rule for debt recharacterization, thus creating a split amongst the federal appeals courts. This Comment argues that the Ninth Circuit’s state law approach is more desirable than promulgating a federal debt recharacterization rule because state law is more predictable and guarantees that a property interest will receive the same protections in federal bankruptcy courts as it would in state courts. This Comment also argues that a state law approach is preferable because it is rooted in precedent and avoids the risk that bankruptcy courts will infringe on substantive state policy.
BCLR Releases Vol. LV No. 3
The Boston College Law Review is pleased to publish the May 2014 issue. Here are summaries of this issue’s Articles and Notes: […]
Volume LVI Board of Editors Announced
We are pleased to announce the Board of Editors for the 2014-2015 academic year: Volume 56 Board of Editors […]
BCLR Releases Vol. LV No. 2
The Boston College Law Review is pleased to publish the March 2014 issue. Here are summaries of this issue’s Articles and […]