Academic journal article Washington and Lee Law Review

Critical Vendors: Line Breakers Par Excellence

Academic journal article Washington and Lee Law Review

Critical Vendors: Line Breakers Par Excellence

Article excerpt

I first heard the term "critical vendor" when I was asked to comment on Travis Turner's Note. Consequently, my perspective on the issues raised by critical vendor orders is definitely that of a non-specialist. While my comments therefore may be of limited usefulness to the bankruptcy expert, my hope is that non-specialist readers will benefit-as I describe my own path in trying to understand this subject, perhaps they will be helped in understanding it too.

For reasons that will become clear, I begin by revealing my perspective on the judicial function. I believe in judicial restraint. My allegiance to this principle is premised in my political philosophy. I believe that the people should govern themselves through their elected representatives. As a general rule, judges should implement a statute as it is written by the lawmakers, even if the judge thinks that the statute is a bad idea. A judge should not, in derogation of statutory language, impose a result that the particular judge thinks is wiser. But why is this so bad? Might not the judge's outcome in fact be wiser? Perhaps, but any improved result would come at too high a costerosion of the principle of self-government. Individual judges, or small groups of judges, many of whom are unelected and some of whom serve for life, should not usurp the authority of the people to govern themselves.

Having supplied this necessary background, I will now begin to trace my progress in coming to grips with Turner's topic. First, congratulations to Turner on his Note. It is comprehensive, clearly written, and insightful. I could not have asked for a better guide into this interesting controversy. But why call it interesting? Is this not a technical, dull topic, with no possible appeal except to the bankruptcy expert? I disagree. Perhaps the subject's chief interest to the non-specialist is captured by the imagery used by another writer on the subject:

The hot, harsh sun beats down on the hundreds, perhaps thousands, waiting in the line snaked around a solitary well. Those who are fortunate will receive a cupful or two of relief; others will get nothing. Suddenly, a small group of figures push their way to the front.

"We'll each take a gallon," their leader says.

"But that's not fair. There's only so much to go around," the well keeper replies.

"We don't care. We're critical vendors."1

This story grips our imagination. It summons up many past experiences. Every reader has encountered that particular subclass of humanity known as the line breakers. From our childhoods, we have all viewed those who break in line as disreputable characters. Critical vendors therefore automatically carry the stigma of immoral behavior. And their method of breaking in line adds to their shame. Critical vendors are bullies. As Turner puts it, they "threaten to disrupt the debtor's reorganization by withholding critical goods and services until paid their pre-petition debts."2 Other commentators have used the terms '"economic blackmail"'3 and "holdup power"4 to describe the strong-armed tactics of critical vendors.

This is powerful language. Its use makes the ordinary person instinctively want to see critical vendors stopped, in the same way that as kids we were happy when some stern teacher or principal yanked a line breaker back to his or her proper place in the line. But now another fascinating element of the topic surfaces: Many of the judges whom we would expect to curtail critical vendors have instead authorized payments to them. While these judges no doubt believe that they are doing the right thing-ensuring "the continued survival and successful reorganization of the firm"5-they have been subjected to harsh criticism. They have been accused of acting illegally. The charge is that without any authority in the Bankruptcy Code, they have violated one of the Code's fundamental canons: "thou shall treat all similarly situate creditors equally."6 These judges have also been accused of "rebellion. …

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