Against the Rules with Michael Lewis On Background: A History of Bankruptcy in the US
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Apr 11, 2023 David Skeel, a corporate law professor at the University of Pennsylvania and expert on bankruptcy, dives into the complexities of the FTX bankruptcy. He discusses the historical evolution of bankruptcy laws in the U.S. and examines the fallout from Sam Bankman-Fried's actions. Skeel highlights the intricacies of filing for bankruptcy, including clawback challenges and asset transactions, shedding light on the legal mazes faced by debtors and creditors alike. This conversation uncovers both the chaos surrounding cryptocurrency and the broader implications for the financial landscape.
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Bankruptcy's Historical Significance
- David Skeel's interest in bankruptcy stemmed from its importance in American history.
- He cites the 19th-century debate about federal bankruptcy law, featuring figures like Hamilton and Jefferson.
Hamilton vs. Jefferson on Bankruptcy
- Alexander Hamilton supported federal bankruptcy law for a fair creditor system in a commercial nation.
- Thomas Jefferson opposed it, fearing it would exploit debtors, especially farmers.
Jefferson's Vision of Bankruptcy
- In Jefferson's view, state procedures would handle bankruptcies, favoring local creditors over distant ones.
- This "home-court advantage" was a major complaint about the lack of a federal system.