Monday, November 14, 2016
Jared W. Speier recently published an Article entitled, Clarifying the Business Trust in Bankruptcy: A Proposed Restatement Test, 43 Pepp. L. Rev. 1065 (2016). Provided below is a summary of the Article:
In order to cure the confusion that has resulted from the absence of a clear definition of the business trust in bankruptcy, a single uniform test should be enacted. This Comment proposes a restatement test that incorporates the history of the business trust as well as courts' various approaches into a single uniform test. This test will reduce debtors' uncertainty by creating a consistent approach to determine when a trust is a business trust.
Part II of this Comment will address the history of the business trust from its roots in feudal England to its use as a tool to circumvent strict corporate statutes. Part III will outline the current state of the law regarding business trusts, both within and outside the bankruptcy context. Part IV proposes a four-factor test to remedy the courts' current confusion regarding business trusts.