THE LOEWEN GROUP, INC. and RAYMOND L. LOEWEN, v. THE ...

The alarums in . . . Texaco, Inc. v. Pennzoil Co., 784 F.2d 1133,
1152 (2d Cir. 1986), which equated a Chapter 11 filing with the
imminent dismissal of 55,000 employees and the destruction of the
valuable assets of a firm[,] are unjustified. Firms in reorganization
go on as before; all operations with positive values are
maintained; operations that are not continued in bankruptcy
should not be continued outside it, either. The principal effect of
the judicial process is to stave off asset-grabbing and to ensure that
creditors of the same level of priority are treated alike. This is, of
course, just what the plaintiffs want – to receive the same treatment
as [the judgment debtor's] other general creditors, who may get
paid off while plaintiffs cool their heels in the appellate process.
Olympia Equip. Leasing Co. v. Western Union Tel. Co., 786 F.2d 794,
802-03 (7th Cir. 1986) (Easterbrook, J., concurring) (emphasis added).
! Loewen's own witness, Laurence Tribe, in his brief to the U.S. Supreme
Court in the Pennzoil v. Texaco case, argued that the very sort of harms
that Loewen alleges here "do[] not comport with the reality of
contemporary bankruptcy." U.S. App. at 0326. As Professor Tribe
explained, a full supersedeas bond requirement that results in a filing for
corporate reorganization protection is consistent with due process, as "[a]
number of corporations, both large and small, have . . . found that
Congress has created [with the 1978 revisions to the bankruptcy code] a
rather pleasant and profitable harbor of refuge in the bankruptcy court."
Id. (quotation omitted). 44
! Countless corporations in the United States, both before and since the
O'Keefe litigation, have successfully – and notoriously – invoked the
protections of Chapter 11 reorganization to stave off the execution of
44 Drew S. Days, III, who was the Solicitor General of the United States at the time
Loewen's petition for relief from the U.S. Supreme Court would have been heard, is in agreement
with Professor Tribe on this point: "I doubt that the financial hardship that allegedly would
follow O'Keefe's execution of the judgment against Loewen would suffice to establish irreparable
harm, since it seems likely that such 'harms' can be avoided, without any due process problems,
by filing a petition for reorganization protection under Title 11 of the U.S. Code." Days
Statement at 31-32 n.19. The United States has also offered the expert testimony of some of the
nation's most respected bankruptcy practitioners and scholars, whose unanimous conclusion is
that Chapter 11 reorganization was a reasonable alternative for Loewen at the time.
44