The Rise of Secured Credit
This chapter explores the way in which the shifts in the fields of finance and non-financial corporates discussed in Chapters 3 and 4 have led to changes in US secured transactions law. It examines the way in which these changes have, in turn, shifted bargaining power towards secured creditors when a debtor attempts to reorganize its debt and equity finance. However, the argument is made that this gives rise to different issues from the traditional concern for secured creditor liquidation bias when it is set in the wider organizational and institutional environment which the book has begun to examine. Turning to England, the chapter explores how the English courts have generally supported the allocation of control rights in distress to senior financial creditors. It reveals why this has, once again, made English corporate reorganization law particularly well adapted to the demands of the past decade.