The End of Bankruptcy, published in 2002, set forth a view of corporate bankruptcy based on a theory of the firm. It argued that, for a traditional Chapter 11 proceeding to be necessary, it had to be the case that a firm had going concern surplus, that the firm’s investors cannot realign the capital structure through normal bargaining, and that a going-concern sale is not possible. Changes outside of bankruptcy had made each of these necessary preconditions less common. This chapter revisits this work, and shows that, despite the upheaval of the Great Recession, it remains the case that traditional reorganizations remain rare. Chapter 11 continues to play a role in our modern economy; it is just not the role that its drafters envisioned.


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