Book Review

Though published before the recent rash of corporate reorganizations, David A. Skeel Jr.'s Debt's Dominion could have been written as a primer for how and why today's corporations are so fast to seek the protections offered by American bankruptcy law. Skeel notes how 'U. S. bankruptcy law is far more sympathetic to debtors than are the laws of other nations.' English bankruptcy, for example, historically was driven by the needs of creditors to protect their investments and/or assets; that usually resulted in a long-term process of court-sanctioned repayments that normally ended, at the corporate level, with the firing of management, the imposition of a trusteeship organized by the creditors, and the eventual breakup and sale of the bankrupt company's assets. Not so with American bankruptcy law. Here, bankruptcy is almost always initiated by the debtor and is thus seen as a shield by which a debtor can 'get a second chance.' For personal bankruptcy, it means the immediate discharge (voiding) of debts, providing a clean slate to begin again. At the corporate level, the result is not only that management gains court protection from its creditors and hence time to reorganize its debts under the umbrella of the court's protection, but that the entire process is placed in the hands of the very managers who had driven the company into bankruptcy in the first place.

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