Debt's Dominion : A History of Bankruptcy Law in America

Rating:
Summary: A thorough, well-written history of US bankruptcy law
Review: Mr. Skeel's book is an excellent description of the meandering history of bankruptcy legislation in the United States, linked to the conflicting reactions bankruptcy legislation has always provoked (debtors are expected to pay; but those who for, reasons beyond their control, become unable to do it, are morally entitled to relief and to a fresh start). The book's introductory chapter explains well the basic legal concepts underlying subsequent chapters and makes the book quite accesible to non-specialists. Besides factual information about legislative changes since the beginning of the XIX century - I found particularly interesting Chapter 2, on how judges created de facto a regimen akin to modern Chapter 11 to deal with bankrupt railroads-, the book frames some of those changes in terms of "public choice" theory. For instance, I found interesting Mr. Skeel's view that the conflicting preferences of the various political groups represented in Congress led to a pattern of cyclical majorities among three alternatives (i.e. a)no bankruptcy law b)strict, "complete" pro-creditor bankruptcy code, and c)lenient, "voluntary-only" pro-debtor bankruptcy legislation) which might explain the instability of US bankruptcy law up to 1898. Chapter 4, on legislative changes introduced in the 30s in the backlash against the previous excesses in Wall Street, sheds significant light on some outstanding and recently-discussed differences between US and British bond legislation (e.g. the prohibition in the US, under the 1939 Trust Indenture Act, of many "collective action clauses" allowing bondholders to accept by majority -as oppposed to unanimity- changes in the terms of the bonds). Some short passages of the book -e.g., those explaining changes in the internal pecking order within the legal professions- will appeal primarily to US practitioners and academics, not so much to a wider audience. The book covers lots of ground and is highly recommendable as written. But if Mr. Skeel were willing to expand its scope, it is easy to think of additional areas which he might usefully explore, at least briefly, in future editions (e.g.lessons from Enron's debacle; recent international debates on "collective action clauses" or even Chapter 11-like "Sovereign Debt Restructuring Mechanism" to deal with the bankruptcy of sovereign borrowers; a more detailed description of Thomas Jackson's characterization of bankruptcy as a "prisoner's dilemma" for creditors;or, finally, to highlight the relatively lenient US bankruptcy law, some passing reference to the traditional, British-style debtors' gaol so well described by Dickens and other authors).