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167 U. Pa. L. Rev. Online 1 (2018-2019)

handle is hein.journals/pennumbra167 and id is 1 raw text is: ESSAY THE BANKRUPTCY FIRM VINCENT S.J. BUCCOLAt INTRODUCTION Bankruptcy scholars spend too much time thinking about distributional norms and not enough assessing the impact of bankruptcy rules on the quality of governance in Chapter 11. That, in short, is the thesis of The Bankruptcy Partition, the contribution of Professors Baird, Casey, and Picker to this symposium.' Of course, the authors being who they are, the Article is about much, much more. This brief response seeks to draw out some of the article's themes and, in the last Part, to suggest an approach to thinking about the nature of the bankrupt firm that could deepen and extend a conversation the authors usefully begin. I. THE ROLE OF THE FIRM IN BANKRUPTCY The Bankruptcy Partition flows from a simple premise-that reorganization law seeks (or in any case should seek) to maximize the value of the bankrupt firm.2 It sounds like a consensus statement of purpose, but in fact it is not so obvious. This is because firm-value maximization is posited in contrast to another plausible norm with which it is often (mistakenly) elided-that of investor-wealth maximization. In a frictionless world, these two norms have identical content. But in the real world, as the authors point out, maximizing firm value often means not maximizing investor wealth.3 More specifically, a focus on firm value t Assistant Professor, the Wharton School of the University of Pennsylvania. 1 Douglas G. Baird, Anthony J. Casey & Randal C. Picker, The Bankruptcy Partition, 166 U. PA. L. REV. 1675 (2018). It is also the point of departure of Professor Rasmussen's contribution. See generally Robert K. Rasmussen, Taking Control Rights Seriously, 166 U. PA. L. REV. 1749 (2018). 2 Baird, Casey & Picker, supra note 1, at 1679. 3 Id. at 1682. (The focus, however, is upon maximizing the value of the estate, not on the total return to creditors as a group.); Id. at 1683 (The proper focus is entirely on what goes to creditors on account of their claims against the estate.). (1)

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