Arizona Law Review
Section I of this article reviews the historical notions of the automatic stay prior to and under the Bankruptcy Act of 1898 (the “Act”) as well as the legislative history of § 362 of the Bankruptcy Code of 1978 (the “Code”). Section II focuses on the arguments for and against upholding the validity of agreements which waive the protections of the automatic stay. Specifically, this section analyzes recent court decisions in this area and attempts to discern differences between permissible and impermissible waivers. Section III reviews the enforcability of other prepetition agreements. In Section IV, we introduce our hypothesis, based fundamentally on economic principles, that notwithstanding recent judicial decisions to the contrary, debtors should be permitted to waive their rights to an automatic stay where such a waiver effectuates a privatization between one debtor and one creditor of the common pool problem. Returning to more practical issues, Section V concludes by discussing concerns regarding waivers and by advising parties on how best to proceed when drafting such provisions.
Edward S. Adams and James L. Baillie, A Privatization Solution to the Legitimacy of Prepetition Waivers of the Automatic Stay, 38 Ariz. L. Rev. 1 (1996), available at http://scholarship.law.umn.edu/faculty_articles/99.