Publication Date

8-1999

Journal

Business Lawyer (ABA)

Abstract

The article challenges the traditional application of the independence principle in letters of credit within bankruptcy law, arguing that courts have misapplied this principle, leading to rulings that unfairly protect creditors. The authors propose treating the issuance of a letter of credit as a transfer of the debtor's property, making it subject to voidable preference rules under federal bankruptcy law. They advocate for a reinterpretation of the earmarking doctrine and suggest legislative action to clarify the treatment of letters of credit in bankruptcy, ensuring fairness and consistency in the legal framework.

Volume

54

Issue

4

First Page

1661

Last Page

1736

Publisher

American Bar Association (ABA)

Disciplines

Bankruptcy Law | Jurisdiction | Law

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