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The article focuses on how artificial intelligence (AI), algorithms, and big data facilitate predation and mask discrimination in consumer finance. Topics include the existing legal landscape and its gaps in addressing algorithmic discrimination, the challenges of applying disparate impact analysis and unfair, deceptive, or abusive acts or practices (UDAAP) doctrines to algorithmic lending, and the need for new burden-shifting rules in tort law to address these issues.

The history of consumer goods and consumer credit markets presents an anomaly: market transactions for consumer goods and credit transactions evolved in tandem, from face-to-face and bespoke to standardized and widely distributed; the law governing these twin "product" markets has not. With consumer goods, the Uniform Commercial Code codifies implied warranties of merchantability and fitness for a particular purpose and the common law of tort provides strict liability for defective products. By contrast, with consumer finance contracts, borrowers enjoy scant common law protection, even though both consumer goods and consumer contracts may be dangerously defective "products." This Article reconsiders the traditional, all-or-nothing choice between tort and contract law to govern injury from different sorts of consumer products. It argues for a symmetric treatment of defective consumer goods and consumer financial products, by enlisting the tort-like doctrines in the common law of contract: the doctrines of unconscionability; good faith; and warranty. The terms of an adhesive financial contract can and should be interpreted in light of an implied warranty that the contract-as-product is as described. The defense of unconscionability should be strengthened to enable enhanced scrutiny of terms that fundamentally undermine contractual products. Its procedural prong should be satisfied by the adhesive nature of the terms, without additional proof of the circumstances of a consumer's surprise about the contents of the contract. The substantive prong should be informed by implied obligations of good faith and the implication that this contract-as-product is fit for ordinary and particular purposes--that it is faithful to the underlying transaction. Attempts by lenders to disclaim implied warranties or obligations of good faith should be viewed as prima facie unconscionable. In this way, the law governing consumer-contracts-as-products would serve the same function as the product liability and warranty laws that govern consumer-goods-as-products. Reconciliation of these laws would ensure that financial contracts are fit for their ordinary purposes as loans. [ABSTRACT FROM AUTHOR]

The article focuses on United Nations Commission on International Trade Law (UNCITRAL) instruments include the Model Law on Insolvency Related Judgments (MLJ), and the Model Law on the Insolvency of Enterprise Groups (MLEG). It mentions join the existing Model Law on Cross Border Insolvency (MLCBI) and the Legislative Guide on Insolvency. It also mentions creditors, may choose a jurisdiction for strategic reasons distinct from either value maximization.

In bankruptcy, creditors exercise governance rights over a debtor firm--they vote to accept or reject a proposed plan of reorganization. These governance rights are apportioned based on the amount of a creditor's claim: one dollar, one vote. "This allocation assumes a claim reflects the creditor's true economic interest in the debtor, and the creditor is thus presumed to use its governance rights in the bankruptcy to maximize the value of the debtor, and hence its claim. Yet a creditor s financial interest is not always limited or even linked to the face amount of its claim. For example, the interest of employee creditors extends beyond recovering backpay to ensuring future employment, while a landlord's interest may be less in recovering back rent than in being abb: to terminate a lease so it can relet the property at a higher rate. Historically, this has been a discrete and manageable problem. Two recent developments in financial markets, however, have made the mismatch between a creditor's total economic interests and its claim-- and the concomitant governance rights-- more problematic. First, a robust market has arisen in distressed debt, enabling investors to purchase bankruptcy claims-- and thus governance rights-- at a discount. Second, the emergence of derivatives markets now enables investors to go short on the debtor and benefit from its misfortune. Combined, these developments enable investors to cheaply acquire governance rights in bankruptcy and then use that power to further the value of their extraneous interests rather than maximizing the value of their bankruptcy claim. As a result, the "one dollar, one vote" principle underlying bankruptcy governance is now in question. This Article illustrates problems that result from the divergence of economic interests and governance rights in bankruptcy. It shows that existing bankruptcy law tools, such as disclosure, vote designation, trading bars, equitable subordination, and equitable disallowance, fail to provide adequate remedies for the problems. Accordingly, we propose an administrable system of "mark-to-market governance," in which the governance rights, but not the economic distribution rights, associated with a creditor's bankruptcy claim would be adjusted to reflect the creditor's true net economic position. Under mark-to-market governance, hedgers and shorts would be subject to proportional dilution, claims purchasers ivould have their governance rights discounted based on purchase price, and secured creditors ivould have their credit bidding rights limited to the value of their collateral. Together these adjustments will promote the core bankruptcy policies of maximizing the value of the debtor firm and equitably distributing its vcdue. [ABSTRACT FROM AUTHOR]

Law and economics scholars have long argued that efficiency is best served when a firm's capital structure is arranged as a single hierarchical value waterfall. In such a regime, claimants with seniority are made whole before the next-junior stakeholders receive anything. To implement this single waterfall approach, those scholars envision a property-based mechanism: a blanket lien on all of a firm's assets, and therefore all of its value (including as a goingconcern). This view informs a number of academic proposals for contractual bankruptcy and relative priority. Coincident with this scholarship, lawyers, scholars, and judges have largely accepted at face value the proposition that Article 9 of the Uniform Commercial Code implements the single waterfall. In other words, they assume that the law allows a secured lender to write contracts that enable it to capture all of a distressed company's going-concern value. This assumption has placed "senior" secured lenders firmly in the driver's seat when a firm falls into distress. So-called "senior" creditors claim priority in all of the value and control over all of the cash. They often push aggressively for a quick sale of the firm as a going concern, or liquidation of its assets, followed by distribution of all of the sale proceeds to the secured lender. In this Article, we illustrate that neither Article 9 nor the federal Bankruptcy Code, in fact, implements the single waterfall. Instead, both maintain a distinction between claims with priority based on a property interest in the firm's assets and claims to the residual value of the firm. Whenever the firm continues in operation, there will always be two value waterfalls--one tied to assets, and the other not. The second waterfall consists of unencumbered assets, as well as the going-concern and other value of the firm that Chapter 11 preserves. The key legal (and often forgotten) concept that maintains this distinction is "equitable tracing"--required by both Article 9 and Chapter 11. The terms "equitable principles" in Article 9 and "equities of the case" in Chapter 11 refer to equitable tracing principles that, in turn, inform secured creditors' "fair and equitable" baseline entitlement under a Chapter 11 plan. On the petition date, the value of the firm is therefore divided into two categories: value traceable to encumbered assets and other value. This relationship must then be managed over time, as the value of the firm changes. To accomplish this, Chapter 11 treats realization of value as a two-step process that we call "Equitable Realization." Equitable Realization uses tracing principles to allocate a firm's value between asset-based and firm-based claimants and to preserve that allocation over time. First, it fixes the relative positions of secured and unsecured claims when a bankruptcy petition is filed. Second, it delays the fixing of the value of secured claims until collateral is sold or a Chapter 11 plan is confirmed. The value of the secured creditor's collateral may increase, but the secured creditor's entitlement to any bankruptcy-created value extends only to "identifiable proceeds"--value that can be traced to assets encumbered on the petition date. As a result, increases in going-concern value of the company in this period, and other bankruptcy-created value more generally, are not within a lender's collateral package. Any going-concern value created or preserved by Chapter 11 is allocated to the bankruptcy estate for the benefit of all stakeholders--workers, retirees, customers, and more. We then address whether Article 9 and the Bankruptcy Code took the right approach by choosing Equitable Realization over the single waterfall. Many scholars, all the way back to Grant Gilmore, have questioned the wisdom of the single waterfall. Joining and expanding on those scholars' concerns, we explain the benefits of Equitable Realization and how the concept resonates with a large family of corporate and commercial law rules that guard against undercapitalization and judgment proofing. Equitable Realization not only implements the Bankruptcy Code's core goal of equitable treatment of creditors, but, by properly identifying firms' residual claimants, limits a firm's ability to externalize risk and increases the prospect of reorganizing troubled companies. The last task of this Article is to test our insights against the valueallocation proposals in the Final Report of the American Bankruptcy Institute Commission to Study the Reform of Chapter 11, as well as priority-related proposals in academic scholarship. Many of the Commission's proposals are consistent with Equitable Realization. But one proposal in particular, redemption option priority, allocates too much to secured creditors relative to our interpretation of current law. [ABSTRACT FROM AUTHOR]

In Chrysler's Chapter 11 bankruptcy, a finding that the debtor was losing $100 million per day justified the hurry-up sale of the company to Fiat. The assertion that a firm is a melting ice cube is frequently offered, soon after a bankruptcy filing, to justify a quick sale of the firm under § 363(b) of the Bankruptcy Code. This raises a policy question: is this speed and the attendant streamlining of process a bug or feature? Do hurry-up going-concern sales maximize value for the bankruptcy estate, or do they facilitate collusive deals among incumbent managers, senior creditors, and potential purchasers? The answer is a little bit of both. It is crucial to distinguish between sales where the court and parties have good information about the value of the company and the costs of delay, from those in which melting ice cube leverage is used to exploit information asymmetries and to lock in a favored deal. To accomplish this sorting and reduce opportunistic use of transactional leverage, we seek to allocate the increased risks of forgone process to the beneficiaries of the sale rather than to the bankruptcy estate. We propose that a reserve—the Ice Cube Bond—be set aside at the time of sale to preserve any potential disputes about valuation and priority for resolution after the sale has closed. This approach retains expedited § 363 sales as a useful way to quiet title in complex assets and maximize value, while preserving the opportunities for negotiation and adjudication contemplated by the Bankruptcy Code. [ABSTRACT FROM AUTHOR]

The article offers the author's insights on the decisions of Great Britain's House of Lords in the case McGrath v. Riddell (HIH). The author says that he applauds the decision of Lord Hoffmann in the case as it embodies the sort of reciprocal comity that lies on his approach of "universal proceduralism." Moreover, it demonstrates that cooperation in such cross-border insolvency cases cannot be unilateralism. The author also relates the case of Maxwell Communication Corp. PLC.

The article discusses the content and institutional context of the revised rules for residential mortgages in the U.S. It offers recommendations on the potential changes to the Dodd-Frank Act related to its safety, liquidity and soundness in financial markets. It also explores the interactions of the Bureau of Consumer Financial Protection with other regulatory agencies in the country.

An essay is presented on relationship between competition and consumer credit in the competitive credit markets in the U.S. It introduces competition stories like the story between lenders for customers, lending technologies driven by regulatory arbitrage and product innovation. These stories depict and explain fully the above-named relationship. It cites three approaches embodied in the pending regulatory reforms to regulate the consumer credit transactions.

The article evaluates the two main existing U.S. legislative models regarding mandatory consumer notification. Model One, as reflected in the California breach notification statute, sets a low threshold for consumer notice and has the advantage of narrowing business discretion as to whether or not to notify consumers. As embodied in the Interagency Guidance, Model Two establishes two tracks for notification, thus, it has a high threshold for consumer notification and a low threshold for notification of the oversight agency.

This article examines data on the market for consumer credit and empirical studies of consumer behavior, including studies of consumers who have filed for bankruptcy. It finds that the focus on increased nonbusiness bankruptcy filing rates ignores important data that raise puzzling questions about the locus of rationality. To address this trend, the article suggests that nonstrategic borrowers must outnumber strategic borrowers.

Focuses on the remedies and the enforcement of limitations on secondary use of human tissue samples when a biobank becomes insolvent. Description on a typology of remedies for privacy violations that depends on whether rights are enforced through a property based regime, a liability based regime or a regime of public enforcement; Explanation on how the choice of enforcement regime affects the level of protection accorded a privacy entitlement when a biobank becomes insolvent; Problems for biobanking that may be created by a property based regime.

Develops an approach based on muddy property rights that has the potential to strike the right problem and the remedy problem in the U.S. Effect of muddy property on the generation of information about transactions in personal information; Use of the contractual privacy policy; Factors affecting the development of a functioning market for privacy policies and practices.