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Many have wrestled with too big to fail firms, with the attention predominantly focused on banks, especially the so-called systemically important ones, i.e. SIFI's ("Systematically Important Financial Institutions"). In this Article we look at too big to fail firms. We focus on cases of large firms that are not banks but were considered too big to fail when in financial distress. We look at a diverse set of multi-jurisdictional, internationally active, and nationally very important large firms, analyze their outcomes and whether and in what way they were supported by their respective governments. This analysis reveals that all these firms can be categorized in one of four types of resolution frames: a standard bankruptcy procedure, a bankruptcy procedure with funding support from the state, an ad hoc solution, and a full bailout by the government. We argue that only the first two types are needed for resolving financial distress, with the latter two inefficient. We provide arguments for the efficiency of the government support via the bankruptcy procedure in a jurisdiction and we discuss how this fits our cases. We conclude that for large firms the moral hazard associated with the too big to fail argument can be mitigated, but that it at least implies a bankruptcy procedure that is able to handle such large cases.

Foreign corporations facing financial distress have a choice: resructure in their home jurisdiction or file for bankruptcy in the United States. And some number of foreign corporations do file bankruptcy petitions in the United States. But besides the occasional anecdotal account, how frequently this actually happens or what types of foreign firms are apt to file in the United States is almost completely unstudied. American firms that file under chapter 11 and foreign firms that file under chapter 15 are the frequent objects of study, but what of the foreign firms that file under chapters 7 or 11? We address this obvious gap in the literature by constructing a database of foreign corporate debtors. By analyzing this new dataset, we conclude that the United States Bankruptcy Code is used by foreign debtors in a way that is diametrically opposed to most of the extant thinking on transnational insolvency. In particular, foreign debtors use the American bankruptcy system to impose a global discharge on assets, without the cooperation of any jurisdiction beyond the United States, where the case is pending. This is in complete contrast with the efforts of UNCITRAL to facilitate cross-border cooperation among jurisdictions.

This article begins from a simple observation: Chapter 11 of the United States Bankruptcy Code is the global standard for corporate restructuring, but at the same time it is a far more complex procedure than most jurisdictions seem to require. This observation begs the question what parts of a bankruptcy system are 'essential'. We argue that two elements are essential because they cannot be achieved by contracting alone: asset stabilisation and asset separation. Stabilisation ensures that the firm's options are maintained. Asset separation ensures that the assets underlying these options can be separated from liabilities that are attached to them by law or contract. Both these elements drive much of the rules that are necessary to resolve distress but also show that parts of Chapter 11 are 'unessential' – for example, rules regarding reorganisation plans. Our goal is not to doubt the 'richness and elasticity' of corporate bankruptcy, particularly in the United States, but to find the essential elements. Beyond asset stabilisation and asset separation, features of the system are a matter of policy and politics. Understanding this helps in structuring insolvency systems and shows that Chapter 11 need not be the standard against which all other laws are measured.