To Declare or Not to Declare [Bankruptcy]: That May Be the Question, A Tale of Bankruptcy in Higher Education
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Asian Institute of Research, Journal Publication, Journal Academics, Education Journal, Asian Institute
Asian Institute of Research, Journal Publication, Journal Academics, Education Journal, Asian Institute

Education Quarterly Reviews

ISSN 2621-5799

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Published: 18 May 2020

To Declare or Not to Declare [Bankruptcy]: That May Be the Question,
A Tale of Bankruptcy in Higher Education

Richard J. Hunter, Jr, John H. Shannon, Henry J. Amoroso, Hector R. Lozada

Seton Hall University, USA

asia institute of research, journal of education, education journal, education quarterly reviews, education publication, education call for papers
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doi

10.31014/aior.1993.03.02.130

Pages: 170-193

Keywords: Bankruptcy, Reorganization, Examiner, Labor, Automatic Stay, Employment, Title IX

Abstract

This case study provides the background for a discussion of the bankruptcy of a composite non-profit corporation under Chapter 11 of the Bankruptcy Code, and the possible alternatives available to bankruptcy. Topics considered include: reorganizations, the selection of a bankruptcy trustee or an examiner, duties of a non-profit board, the automatic stay, aspects of the creation and confirmation of the bankruptcy plan, priority of creditors, termination of employment contracts for tenured and non-tenured faculty and those faculty represented by a union, at-will employment, and Title IX implications for any bankruptcy filing. The case study then turns to a discussion of options and perspectives available in the case that bankruptcy under Chapter 11 is not seen as a viable or practical alternative. Could the real target of restructuring and cost cutting be academic tenure?

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CASES

Biediger v. Quinnipiac University (2009). 616 F. Supp 2d 277 (United States District Court,

District of Connecticut)

Cathcart v. Micale (2019). 402 F. Supp. 3d 110 (United States District Court, Eastern District of

Pennsylvania)

Cejka v. Vectrus Sys. Corp. (2018). 2018 U.S. Dist. LEXIS 173599 (United States District

Court, District of Colorado)

Cohen v. Brown University (1993). 991 F.2d 888 (United States Court of Appeals, 1st Circuit)

Grove City College v. Bell (1984). 465 U.S. 555 (United States Supreme Court)

In re Baldwin United Corp. (1984). 47 B.R. 898 (United States District Court, Southern District

of Ohio)

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District of Ohio)

In re Betty Owen School, Inc. (1996). 195 B.R. 23 (United States Bankruptcy Court, Southern

istrict of New York)

In re Big Rivers Elec. Corp. (2004). 355 F.3d 415 (United States Court of Appeals, 6th Circuit)

In re Bricksin (2006). 346 B.R. 497 (United States Bankruptcy Court, Northern District of

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District of Texas)

In re Roth American Industries (1992). 975 F.2d 949 (United States Court of Appeals, 3rd

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NLRB v. Bildisco (1984). 465 U.S. 513 (United States Supreme Court)

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Relations Board)

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SELECT STATUTORY MATERIALS

Cal. Corp. Code Section 5239(a): No personal liability for certain volunteers

Civil Rights Restoration Act of 1987 (2012). 20 U.S.C. Section 1681.

Higher Education Act (1965). Pub. L. 89–329.

H.R. Rep. No. 109-31, pt. 1, at 145 (2005): Bankruptcy Abuse Prevention and Consumer

Protection Act of 2005

National Labor Relations Act (1935, as amended). 29 U.S.C. Sections 151- 169.

N.Y. Not-for-Profit Corp. Law Section 720-a: No personal liability for certain volunteers

Title IX of the Educational Amendments (1972). 20 U.S.C. §1681 et seq.

Tower Amendment (1974). 120 Congressional Record 15: 322-323.

U.S. Code Title 11— BANKRUPTCY (The Bankruptcy Act, 2019)

1. CHAPTER 1—GENERAL PROVISIONS (§§ 101 – 112)

2. CHAPTER 3—CASE ADMINISTRATION (§§ 301 – 366)

3. CHAPTER 5—CREDITORS, THE DEBTOR, AND THE ESTATE (§§ 501 – 562)

4. CHAPTER 7—LIQUIDATION (§§ 701 – 784)

5. CHAPTER 9—ADJUSTMENT OF DEBTS OF A MUNICIPALITY (§§ 901 – 946)

6. CHAPTER 11—REORGANIZATION (§§ 1101 – 1195)

7. CHAPTER 12—ADJUSTMENT OF DEBTS OF A FAMILY FARMER OR FISHERMAN WITH REGULAR ANNUAL INCOME (§§ 1201 – 1232)

8. CHAPTER 13—ADJUSTMENT OF DEBTS OF AN INDIVIDUAL WITH REGULAR INCOME (§§ 1301 – 1330)

9. CHAPTER 15—ANCILLARY AND OTHER CROSS-BORDER CASES (§§ 1501 – 1532)

20 U.S.C. Section 1002(a)(4)(A): Title IV eligibility

28 U.S.C. Section 1930(a)(6): Bankruptcy fees.

42 U.S.C. Section 14503(a): Limitation on Liability for (Non-Profit) Volunteers

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