The Honorable Samuel L. Bufford*
The Great Recession that began in approximately 2008 brought severe financial difficulties to a large number of homeowners in the United States. With a rise in the unemployment rate from 4.6% to 10%,many lost their jobs and their ability to make their home payments. At the same time, with an average 30.3% reduction in housing values (which in some places has approached nearly 60%), many homes are now worth substantially less than the debt owed on mortgages secured by the homes. Some 5 million homeowners are at least two months behind in their mortgage payments, and RealtyTrac predicts that some 1.2 million homes will be foreclosed on in 2011. The housing crisis continues to get worse, not better.
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* Judge Bufford served as a U.S. Bankruptcy Judge in Los Angeles for twenty-five years until his retirement in 2010. He is now a Distinguished Scholar in Residence at Dickinson School of Law, Pennsylvania State University.
Edward J. Estrada *
Following the economic meltdown that began in the spring of 2008, immediate and longer term ramifications began to ripple through all aspects of the economy. Clearly, these tremors have not yet subsided, and continued fallout will be felt in the coming years. Importantly, even those companies and industries that have seemingly passed through the most immediate wave of impacts will be susceptible to the ongoing struggle to achieve sustainable growth. Many such companies may experience future defaults, largely dependent upon the strength and vitality of economic growth in the coming year and their industry performance in that time frame.
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* Partner in the Commercial Restructuring and Bankruptcy Group of the New York office of Reed Smith LLP. The author would like to thank Aaron Bourke, an associate in the Commercial Restructuring and Bankruptcy Group of the New York office of Reed Smith LLP, for his contributions to the article.
Hollace T. Cohen *
The Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) was enacted on July 21, 2010. A key element of the Dodd-Frank Act is Title II, entitled Orderly Liquidation Authority. Title II of the Dodd-Frank Act is a new insolvency regime intended to end “too big to fail” bailouts by providing the United States government with the ability to appoint the Federal Deposit Insurance Corporation (the “FDIC”) as receiver to administer the orderly liquidation of a nonbank financial company or bank holding company whose failure presents systemic risk to the financial stability of the United States.
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* Partner, Troutman Sanders LLP, New York, New York. J.D., New York University. Ms. Cohen’s practice includes the representation of secured and unsecured creditors, including lenders, bondholders, indenture trustees, trade creditors, lessors and lessees of real and personal property, and acquirers of assets in bankruptcy cases and out-of-court restructurings. Ms. Cohen would like to thank Brett Goodman, who also practices at Troutman Sanders, for his assistance with this article and Richard Lieb for his insightful comments.
Clayton D. LaForge *
The nascent Chinese middle class bypassed the “Great Recession” despite China’s global infrastructure investments suffering dire consequences. Wall Street’s toxic tranches stacked atop one another in collateralized debt obligations seemingly comprised the most epidemic and obscure entity in financial history. Media outlets reported China’s second largest commercial bank held over nine billion dollars in U.S. subprime mortgage-backed securities, yet China’s gross domestic product surged as usual by 8.7% in 2009. Members of the middle class marched on, renovating the apartment and following the latest trends.
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Lindsey Vann
The 1972 landmark ruling in Furman v. Georgia appeared to be the end of the arbitrary imposition of the death penalty in the United States. Almost everyone around the country, including the Justices who decided Furman, believed the decision permanently invalidated America’s death penalty. Though each of the five Justices voting in the Furman majority authored individual opinions with differing reasoning, each relied on the arbitrary imposition of the death penalty in concluding the punishment was unconstitutional under the Cruel and Unusual Punishments Clause of the Eighth Amendment. The Justices in the majority had little Eighth Amendment precedent to rely upon in declaring the death penalty unconstitutional, but Furman came to be known for condemning the arbitrary imposition of the penalty. The Court’s concern that the unique punishment of death not be imposed in an “arbitrary and capricious manner” seemed to indicate the Constitution would not tolerate a system where the penalty was “so wantonly and so freakishly imposed.”
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Kyle Graham *
On August 3, 2010, President Obama signed the Fair Sentencing Act of 2010 into law. This measure eliminated the five-year mandatory minimum prison sentence that previously adhered under federal law upon a conviction for possession of five grams or more of crack cocaine. The Act also increased the amount, in weight, of crack that must be implicated for either a five- or a ten-year mandatory minimum sentence to apply upon conviction of any of several federal drug trafficking crimes. The latter provision significantly reduces the disparity between the amount of crack that will trigger these mandatory minimums and the amount of powder cocaine that will produce the same results. Whereas federal law previously treated one hundred grams of powder cocaine as the equivalent of one gram of crack for sentencing purposes, after the Fair Sentencing Act, the statutory ratio now stands at a mere 18:1.
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* Assistant Professor, Santa Clara University School of Law. The author thanks David Ball for his input, and Lauren Case and Valerie Perdue for their research assistance.
