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Brynna Smith, a 3L at Mizzou Law, recently published a paper in the student galley of the American Bankruptcy Institute Journal, which is a significant organization in the bankruptcy field.
Her paper, “Detroit v. Everybody: Governance Reform and the Limits of Chapter 9” explores Detroit’s descent from a thriving industrial city to the largest municipal bankruptcy in U.S. history. The piece suggests that Detroit’s experience may be especially significant at a time of increased debt and economic uncertainty.
It analyzes how Chapter 9’s treatment of municipal bankruptcy contrasts with Chapter 11’s treatment of business reorganizations, discussing the ethical implications resulting from the absence of governance reform mechanisms in Chapter 9.
The paper finds that Detroit’s experience supports those who have argued that a true “fresh start” requires not just financial restructuring but also the opportunity for systemic governance reform to prevent recurring financial crises and protect citizens from administrative failure.