Alexandria, Va.— The latest American Bankruptcy Institute (ABI) podcast features ABI Resident Scholar Prof. Melissa Jacoby joined by former ABI Resident Scholar Prof. Charles Tabb, who applies his research on bankruptcy and the Fifth Amendment's "Takings Clause” to current legislative proposals for remedying Puerto Rico's debt crisis. “The received wisdom that secured creditors have a Constitutional right to the value of their collateral, which is protected by the ‘Takings Clause’ is wrong,” said Tabb, the Mildred Van Voorhis Jones Chair in Law at the University of Illinois College of Law. Prof. Tabb published his research in an article prepared for the ABI-Illinois Symposium on Chapter 11 Reform in 2014 titled "The Bankruptcy Clause, the Fifth Amendment, and the Limited Rights of Secured Creditors in Bankruptcy."
The "Takings Clause" of the Fifth Amendment of the Constitution provides that private property shall not be taken for a public use, without just compensation. The Bankruptcy Clause of the Constitution states that Congress shall have the power to establish uniform laws on the subject of bankruptcies throughout the United States. “The ‘Takings Clause’ of the Fifth Amendment does not, and should not, constrain the powers of Congress to modify the substantive rights of secured creditors under the ‘Bankruptcy Clause,’” according to Tabb’s research.
Tabb applies his research of the “Takings Clause” and “Bankruptcy Clause” to examine current proposals before Congress to remedy Puerto Rico’s deepening financial distress. “Everything that’s being proposed to be done with regard to debt relief in Puerto Rico is squarely supported by longstanding constitutional precedent under the congressional powers of the bankruptcy clause,” Tabb said.
Click here to listen to the podcast.
For the latest news and analysis on Puerto Rico’s debt crisis, be sure to visit ABI’s “Puerto Rico in Distress” webpage.
ABI’s podcast series features interviews with important figures or experts discussing timely bankruptcy topics or issues. ABI podcasts are freely available to members, the public and the press, and can be accessed on ABI’s Newsroom website.
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ABI is the largest multi-disciplinary, nonpartisan organization dedicated to research and education on matters related to insolvency. ABI was founded in 1982 to provide Congress and the public with unbiased analysis of bankruptcy issues. The ABI membership includes more than 12,000 attorneys, accountants, bankers, judges, professors, lenders, turnaround specialists and other bankruptcy professionals, providing a forum for the exchange of ideas and information. For additional information on ABI, visit www.abiworld.org. For additional conference information, visit http://www.abi.org/calendar-of-events.