Professor William Widen Receives Grant from the American Bankruptcy Institute Endowment Fund
The American Bankruptcy Institute Endowment Fund has awarded a $22,000 grant to Professor William H. Widen of the University of Miami School of Law to study the prevalence of substantive consolidation in large public company bankruptcy proceedings. Substantive consolidation is a judicially created remedy where the assets and liabilities of two or more entities are pooled, and the pooled assets are aggregated and used to satisfy the claims of creditors of all the consolidated entities.
Professor Widen’s motivation for the study is to find a correct understanding of substantive consolidation and its uses to aid courts as they consider the scope and limits of this doctrine. He has so far found that case law rhetoric, which suggests that substantive consolidation should rarely be used, is at odds with actual practice, which finds use of the doctrine to be a common and essential tool of case administration.
"I hope this research will provide a better understanding of the conditions under which the corporate form is respected and ignored in practice,” Professor Widen said. “This may allow for a more precise formulation of the contours of substantive consolidation doctrine which, though extremely important for business reorganizations, remains unsettled at this time."
The study will expand and complete a preliminary study in which Professor Widen found that 11 of the top 21 bankruptcy proceedings (measured by asset size) from 2000-2004 used the substantive consolidation doctrine as part of the reorganization. Professor Widen and his research staff will collect and analyze primary-source materials for additional cases from 2000-2004 to arrive at a more definite frequency number for large public company bankruptcies. Its goal is to show that proper formulation of the doctrine is essential for the efficient reorganization of corporate groups.
The ABI Endowment Fund was created in 1989 to provide a secure financial base for the Institute and to provide resources for insolvency research and education. Projects eligible for Endowment funding include research by individuals or entities relating to bankruptcy or insolvency; surveys or other analytical investigation; the education of judges, court personnel, other governmental personnel and the general public; scholarships or other educational grants; support for the Robert M. Zinman Resident Scholar; and support for both the Chief Judge Conrad B. Duberstein National Bankruptcy Memorial Moot Court Competition and ABI’s Corporate Restructuring Competition. Since 1998, the Fund has awarded nearly $500,000 in grants.
Professor Widen is a cum laude graduate of Harvard Law School and currently teaches commercial law, contracts, and other business subjects at the University of Miami School of Law. Click here for Professor Widen's Web page.
