18 April 2014

Two For One: Detroit and the Archdiocese of Milwaukee (With A Nod to Dante)

Go here to read a very good summary of how the emergency manager of the City of Detroit is working deals with each creditor constituency. One-by-one or divide-and-conquer, whatever it's called, is exactly what debtors do in a Chapter 11 and there's no reason to use anything different in Chapter 9. It's all about the money and votes (of creditors, not citizens), not some abstract notion of fairness. (Go here to download an early draft of my article on this topic; a final version will be coming any day from the American Bankruptcy Law Journal.)

I suppose it's appropriate that I finished reading Clive James' new translation of The Divine Comedy on Good Friday, the day after Judge Susan Kelly approved the disclosure statement of the Archdiocese of Milwaukee. You can read about it here.

I wonder if anyone in Judge Kelly's courtroom realized that Dante's account of his journey through hell and purgatory to heaven began the same day, the Thursday before Easter, 700 years ago?

More On An Aging Population

I've commented here, here, and here about the effects of a falling birthrate on public retirement systems. A falling birthrate is one, albeit small, reason why municipalities are finding it increasingly difficult to fund pension promises to retirees. It's only a matter of time before states suffer the same fate, and not much longer yet before the federal Social Security system finds itself broke. Social Security can be changed and thus saved by legislative action, at least once it becomes politically feasible, but state and municipal public pension may be locked in place. (For the reasons why states and cities can't modify their pension obligations go here and here.)

If you want to see 30 or so years into America's future, read this piece at the Washington Post about the increasingly dire situation in Singapore. Singaporeans aren't having children; the birthrate is 1.2, not enough to replace a population that is retiring from productive labor. Already the ratio of workers to retirees is 6:1 today (down from 17:1 30 years ago) and is expect to fall to 2:1 in only 16 years--by 2030.

If we aging folks hope to retain the good will of our children and grandchildren, we had better give some thought to saving more and expecting less from our government retirement systems.

15 April 2014

Municipal Financial Distress Resolved!

Props to Juliet Moringiello, the staff of the Widener Law Journal, and the many speakers at Monday's symposium "Solving the Problem of Municipal Financial Distress." Along with the many in attendance, I concur the symposium was a great success.

The morning saw two panels that focused on current and potential developments in Chapter 9 (municipal) bankruptcy. I was part of the second panel that looked at standards for confirmation of a Chapter 9 plan of adjustment. With pre-symposium planning by Mark Kaufman, additional panelists Guy Neal, David Skeel, and I, together with moderator Michael Hussey, managed to keep the crowd entertained and informed about the largely unlitigated "back-half" issues in Chapter 9.

Issues of a municipality's eligibility to be in Chapter 9 have gotten all the attention so far but we can expect to see some law made next month in the confirmation of the plan of Stockton and later this summer for Detroit. Among the topics of our discussion were the three-fold requirements that a plan be fair and equitable, not discriminate unfairly, and be in the best interests of creditors. There's plenty of room for disagreement about these tests because their history in Chapter 11, place in Chapter 9, and lack of reported decisions make their application to municipalities uncertain.

The afternoon sessions addressed the macro-problems of American cities, problems to which Chapter 9 offers only a small part of a solution. I plan to post on all the other panels in due course but urge folks to keep their eyes open for the fall 2014 issue of the Widener Law Journal to see the range of topics addressed at this symposium.

13 April 2014

T-1 To Solving the Problem of Municipal Finance

The Widener Law Journal's symposium "Solving the Problem of Municipal Financial Distress" begins tomorrow. Read more about it here.

 I hope to send out some tweets (@profpryor) as the program progresses. I'm confident I'll post a blog entry or two after it's over. In the meantime, I'm forced to wait in the Harrisburg Hilton.

12 April 2014

Economics ... In The Beginning

Go here to watch a fine interview of Paul Williams. Williams is Executive Director of the Marketplace Institute and Academic Dean at Regent College in Vancouver, British Columbia (not to be confused with my institution, Regent University, Virginia Beach, Virginia ), and was interviewed for Comment, a print and online magazine whose byline is "public theology for the common good."  The topic under discussion sets up matter well: "In the Beginning Was Economics."

I am especially grateful that Williams grounds economic life in the creation account. In the first chapters of Genesis, humanity as a whole through our first parents was called to work, and to work cooperatively, just as God, in whose image we were created, worked as Three in One. Likewise, humans were called to work creatively, reflecting their marvelously creative Creator God.

Favoring grounding economic life in creation shouldn't surprise those who have read what I have written. For examples, you can download my very short The Law of Contracts: A Place to Start in which I argue that two pairs of presuppositions underlie contract law: the twin virtues of love and justice as well as the sad reality of sin and its deforming effects. These presuppositions work themselves out in history but not history as a chronology of social causes and effects; rather, history as the dynamic of creation, fall, redemption and, ultimately, consummation. Those who enjoy full-length articles with accompanying "scholarly apparatus" (i.e, footnotes for the most banal of propositions) might wish to download my Principled Pluralism and Contract Remedies.

Williams then addresses a topic on which I'm afraid I may have exhausted my readers' patience: the moral justification of the modern business corporation. For some of my ideas on this topic check a few of my posts here, here, and here. Williams briefly discusses the new "social enterprise" form of corporate existence. He doesn't mention crowdfunding, something I've discussed here and here, but there's only so much he could do in a little over 12 minutes.

In conclusion, Paul Williams neatly and clearly summarizes what I think is the epitome of Christian thinking about the fundamental nature of the human vocation and some aspects of its current expression..


11 April 2014

Time to Download Sherlock Duane

A short while ago I posted some words here about a delightful article about a dry subject by colleague James Duane. The article can now be more efficiently downloaded by going to the SSRN website here.

10 April 2014

Checking Under Detroit's Seat Cushions

Go here and here to read two accounts of Detroit's latest offer to bondholders that puzzles me. Just where did Detroit find the extra hundreds of millions of dollars it now proposes to pay on account of its "UTGO" ("unlimited tax general-obligation") bonds? It can't be from selling the city's art collection for more money because, oddly, the city wants to take less than the latest offers on the table for the assets of the Detroit Institute of Art. (The second article linked above also addresses the art-sale issue.)

Unlike businesses in Chapter 11 that can promise more money to their creditors by proposing to operate more profitably or entering new product lines, cities are pretty much stuck with what they have on the income side: property taxes and user fees. Where did Detroit suddenly "find" the wherewithal to pay huge bucks today that it couldn't pay last week?

None of this is to suggest that Detroit shouldn't pay more to its bondholders. It's only to express the obvious concern that even current city management is making it up as it goes along. Which begs the question: Should anyone believe what Detroit is saying?

(For more municipal bankruptcy thoughts go here to download an early draft of an article that will soon be coming out in the American Bankruptcy Law Journal.)

09 April 2014

Dale Coulter and The (Mis)Place Of The Humanities In Higher Education

Go here to read a piece at the First Things blog by Regent School of Divinity colleague Dale Coulter titled "Humanities and the Shaping of Life." Coulter applies to contemporary higher education a critique similar to the one I have made of contemporary neo-classical contract theory and libertarian political theory. (Check here for some of my comments about contracts and here for some thoughts on political theory.)

On to the place of the humanities in contemporary higher education. In the classical past, in Coulter's words, the goal or end of  of "the humanities" was that they they "should lead to human flourishing." For Christians, the purpose of study of the biblical texts ("salutary teaching") was, "in the words of Paul," to produce "piety or godliness, which gives rise to a moral life grounded upon the intrinsic social nature of human existence." In other words, the purpose of humane studies on either the Classical or Christian account was to assist one in becoming a better person.

All has changed in modern times as we can see in Harvard's recent apologia for the humanities. No longer is the purpose of the study of the great (and not-so-great) texts of a culture to promote human flourishing much less piety or godliness. Of course not; how could any modern person think such antiquated thoughts? After all, we now know that there is no end or goal of life that is particularly human. Instead--and here I'll let Coulter himself summarize Harvard's explanation of the value of the humanities--
There are three traditions derived from the humanities that inculcate this capacity, according to the report. The first is a tradition of criticizing errors in texts and approaches to historical periods commensurate with Renaissance humanism. Like their forebears, classicists must practice a “suspicious hermeneutic.”
The second is a tradition of “disinterested, artistic enjoyment” that moves beyond the ideological content conveyed by any work of art to an appreciation of the beauty and form of the piece. Art can be re-appropriated for its aesthetic value once freed from the ideology it conveys. The third is a tradition that seeks to re-appropriate the past in the service of identity politics. Through the lens of gender, race, and sexual orientation, the past can be re-read in a way that creates “communities of resistance,” which can become “liberating, transformative social movements.”
In short, we moderns should study the work of the Western tradition with an attitude simultaneously of suspicion and haughty disinterest all the while in the service of identity politics. Heaven help us. If that's the how and why of the humanities we should stop reading literature, listening to great music, and observing serious art right now! No wonder folks want STEM degrees. At least science, technology, engineering, and math are premised and practiced on a foundational belief that there is truth out there and that we can come to know it.

Harvard's report entirely misconceives the place of the humanities in education. Instead of giving us tools of deconstruction and reconstruction of sexual identity groups, the humanities can serve as pieces of the puzzle by which we come to understand what it means to be human beings, created in the image of God, horribly fallen into sin, but destined to glorify our Creator and Redeemer.

08 April 2014

Archdiocese of Milwaukee Bankruptcy Inches Forward

Go here to read what the Milwaukee Journal-Sentinel reports about the position of the creditors and the abuse victims in the bankruptcy of the Archdiocese of Milwaukee. The Journal-Sentinel also links to the 154-page Disclosure Statement submitted by the Archdiocese with the strike-throughs and additions proposed by the creditors' committee. A disclosure statement, by the way, is the document that explains, ostensibly in language a non-lawyer can understand, what the plan of reorganization of a Chapter 11 debtor (like the Archdiocese) proposes to do.

There's more detail in the Disclosure Statement than any non-bankruptcy specialist would wish to read. I want only to make three points. First, local (Milwaukee) counsel for the creditors' committee is my former firm, Howard, Solochek & Weber (or what's left of it). Second, the creditors' committee takes some positions in the disclosure statement on which it has already lost. And third, this striking assertion:
The Committee ... contends that solicitations of rejections of the Plan is not limited to the information contained in this Disclosure Statement.
Only a bankruptcy wonk would notice this and that includes me not only because I believe that facts asserted when soliciting votes (distinguished from conclusions drawn from those facts) should limited to those in the disclosure statement per Bankruptcy Code §§ 1125(b) and 1126(e) but also because I took the opposite position when representing the creditors' committee in the Zaks Stores, Inc. bankruptcy back in the mid-1990s.

I have no particular interest in the ultimate outcome of the Chapter 11 of the Archdiocese of Milwaukee but I hope to track it for developments that I (and perhaps no one else) think are interesting.

07 April 2014

The Grand Budapest Hotel

We went to see Wes Anderson's The Grand Budapest Hotel Saturday night. While enjoyable and quite funny at times, it didn't quite measure up to my expectations. With the exception of Jeff Goldblum (whose voice makes me reflexively recall his dorkish role in Jurassic Park), the acting was superb. Anderson's direction oscillated between mostly delightful (recalling an adult version of The Fantastic Mr. Fox) and off-putting. Casting Tony Revolori as the young Zero Moustafa was perfect and Saoirse Roman as the object of his affections was excellent.

While no one should complain about Ralph Fiennes performance as Gustave H., I thought that the inconsistencies of his character were distracting. On the one hand, Gustave H. was the consummate concierge, serving his guests to the utmost with perfect fin de si├Ęcle aplomb. On the other, he was contemporary crude as he dealt with the increasingly deadly consequences of his rakish behavior. Perhaps Anderson meant to say that the bipolar personality of Gustave H. reflected his bisexuality but whatever the reason, I found it distracting.

The layered textuality of film is quite interesting. The movie opened with a young girl venturing into a decaying Jewish cemetery in a fictional Eastern European (but Alpine!) city on a cold autumn day with a book under her arm. She stands briefly before the grave of "The Author" before sitting to read the book. It is in that reading, an account of The Author's visit to the Grand Budapest Hotel in the not-too-distant past and his over-dinner reminiscences with the now-aged Zero Moustafa about his experiences in the 1930s, that the balance of the film is formed. We thus have what appears to be fictional film of the true account of a fictional author.

But that's not all. In the closing credits we see that Anderson credits the film to a real author, Stefan Zweig. Zweig was an Austrian Jew, an aesthete, and a well-know pre-WWII author who committed suicide in 1942 out of despair over the collapse of European culture. In some respects, therefore, Zweig was the inspiration for both Gustave H. and The Author. Just one more layer of intertextuality!

The Grand Budapest Hotel is a good movie. Not a great one to be sure but one filled with fine acting, interesting directing, and a deeply textured approach to the art of film making.

06 April 2014

American Culture: Is There Such A Thing?

Quoting Alastair Roberts at mereorthodoxy.com,
To what extent can a society that so elevates, empowers, and facilitates unfettered choice truly be a "culture"? Without some sort of functional authority or principle whereby individual choices are coordinated with or ordered to common goods that transcend them, I doubt that we have a culture at all, just prevailing patterns of consumption.
"Just prevailing patterns of consumption." That pretty well sums up what has become the American way of life. From modern business corporations to neo-classical accounts of contract law to sexual autonomy as constitutional doctrine, there is no "good" much less a "common good." And without a common good--even a contested one--there is no culture.

04 April 2014

Endangered Gender In Print

Over a year ago I posted several notes (here and here) about the symposium hosted by Regent Law School's Journal of Law & Public Policy on the topic of "Endangered Gender: A Discussion of Sex-Selective Abortion." I'm pleased to report that the proceedings of the symposium have been published.

The articles are not yet available online but I suggest that two might be of special interest. Colleague Lynne Marie Kohm wrote The Challenge of Teaching Gender Equality in a World of Reproductive Gendercide and friend Dr. Prakash Tyagi, Executive Director of the Indian social-service organization GRAVIS, based in Jodhpur, Rajasthan, wrote a poignant piece, Missing Daughters of India, in which he describes the extraordinary gender imbalance being created in India, its causes, and what his organization is doing to combat the persistent elimination of girls before birth.