Bankruptcy and the Administrative State

Authors

Robert Kenneth Rasmussen

Abstract

The tension between the public and private law regimes is particularly problematic in the bankruptcy context. Although generally viewed as a private regime, bankruptcy law does not excuse a debtor from compliance with the dictates of the administrative state, and courts frequently are called upon to reconcile the competing claims of the bankruptcy process and various administrative entities. Preoccupied with the private debtor-creditor paradigm, theorists have failed to provide a normative analysis of the relationship between bankruptcy and the administrative regime.

In his Article, Professor Rasmussen integrates the administrative state into bankruptcy theory. Reflecting on the deficiencies of the dominant bankruptcy model-the creditors' bargain model-Professor Rasmussen points out that mere cost-benefit analysis does not adequately justify resort to the bankruptcy forum when competing governmental policy objectives must be served. Moreover, bankruptcy courts are not always institutionally capable of resolving nonbankruptcy disputes. Professor Rasmussen proposes a framework for determining when disputes should be resolved inside or outside the bankruptcy forum. He argues that such determinations must be based on careful consideration of the nature of the government's dispute with the debtor and the relative institutional competency of the bankruptcy court and the competing forum.

Recommended Citation

Robert Kenneth Rasmussen, Bankruptcy and the Administrative State, 42 Hastings L.J. 1567 (1991).
Available at: https://repository.uclawsf.edu/hastings_law_journal/vol42/iss6/2