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"Some historical context" [2019] ELECD 2080; in Lubben, Stephen (ed), "American Business Bankruptcy" (Edward Elgar Publishing, 2019) 2

Book Title: American Business Bankruptcy

Editor(s): Lubben, Stephen

Publisher: Edward Elgar Publishing

Section: Chapter 1

Section Title: Some historical context

Number of pages: 7

Abstract/Description:

While the Constitution gave Congress the power to enact national bankruptcy laws, Congress only really used that power in a serious way starting in 1898. The current United States Bankruptcy Code, which includes chapters 7 and 11 among other chapters, was enacted in 1978. Chapter 7, the liquidation provision, comes from a long historical line of bankruptcy law. On the other hand, chapter 11, the reorganization provision, is rooted in the equity receivership process first developed in the nineteenth century to reorganize railroads. This chapter explains how understanding that different historical lineage can help understand the current Bankruptcy Code, where similar terms sometimes have very different aims.