CreditSlips

King Solomon's judgment regarding the two women claiming to be the mother of the same child is a familiar story--the King proposed chopping the baby in two and giving each mother half of the child. One mother consents, while the other says that she will forfeit the child. The one who prefers receiving 0 child to .5 child is then awarded the whole baby because the real mother would never consent to the child being harmed.

On behalf of Credit Slips, I want to thank Troy McKenzie for joining us a guest blogger. Professor McKenzie's posts raised lots of interesting questions about attorneys' fees in bankruptcy and the Constitutional status of bankruptcy courts. I'm glad to see that his posts spurred some good discussion. Thank you again Troy!

In January, households and businesses filed bankruptcies at the rate of 5,090 per day. The last time the daily bankruptcy filing rate was this low was January 2009. Monthly bankruptcy filings are sensitive to the number of business days in a month, making the daily filing rate a more meaningful figure than the absolute level of filings.

The City of Vallejo has filed its Disclosure Statement and plan in its Chapter 9 bankruptcy case.  The plan proposes paying general unsecured creditors, mostly employees and retirees, about 5 cents on the dollar from a $6 million fund, an amount roughly equivalent to the legal fees paid in the case through December 2010.  Vallejo apparently did not finance capital projects with unsecured

Some of the comments to Stephen Lubben's post on "overhead" raised the longstanding complaint about high fee awards in New York and Delaware Chapter 11 cases. We all know the academic and political condemnations of Chapter 11 as merely a feast for lawyers.