Braucher’s Business: Foreseeing Relational Contract Bankruptcy

Jean Braucher was a leading scholar of contract and consumer bankruptcy law. Although she did not devote substantial energy to corporate bankruptcy, an important but comparatively under-cited 1994 paper, Bankruptcy Reorganization and Economic Development (“Economic Development”) recognized that “relationalism”—and, by inference, relational contract theory—could provide a powerful set of tools with which to analyze corporate reorganization under chapter 11 of the Bankruptcy Code. The rise of “distress investing,” and distress investors’ use of contract in bankruptcy, require us to better understand the relational aspects of the contracting environment in chapter 11. In Economic Development, Jean anticipated the relevance of this analysis long before most of us did.