Future Claims in Bankruptcy: A Utility Driven Marriage

«Mass torts» appeared in the legal spotlight over the last couple of decades due to special, legal and non-legal, circumstances. Closely afterwards, the US Bankruptcy Code widened the definition of claims, intending to make it as broad as possible. Latent tort injuries, those who were not to appear until after the resolution of the bankruptcy case, were now susceptible of being interpreted as claims. As a result interested parties seeking to invest in the troubled business couldn’t accurately evaluate what the potential cost of the successor liability doctrine might be and even people not yet injured could be potentially involved in a bankruptcy proceeding, regardless of being unaware of it. This note intends to shed light over the inescapable upper limit of recovery presented by the debtor’s assets in addressing the «futures problem» in bankruptcy and the social welfare diminution of excluding them.