Stephen J. Lubben
Delaware's Irrelevance, the issue's sixth article, is
written by Professor Stephen J. Lubben. In this piece, the
author discusses the bankruptcy community's recent debate over
whether Delaware, out of desperation for large cases, has reduced
its level of supervision, causing a striking rise in companies
reentering chapter 11. The author, based on a previously
developed sample of chapter 11 cases, uses several non-Delaware
specific variables to develop a new regression model that predicts
whether large companies in chapter 11 will refile bankruptcy within
five years. The author's model demonstrates that many
non-Delaware factors influence the likelihood that a company will
reenter bankruptcy. While the article does not conclude that
Delaware is entirely irrelevant to the issue of refilling, the
author does question the belief that Delaware is a significant
factor in this problem and suggests additional areas that need
further studying.