ABSTRACT
Bankruptcy establishes a new set of rules. But perhaps a new set of rules was needed, since for many investors Texas International, Inc. had stopped being a long-term oil play and had become a long-term problem. Cash flows were diminished by falling oil prices, the loss of the Egyptian lifting agreement, and continued spending. An initial step in the bankruptcy process occurs when the office of the United States trustee instigates the formation of committees by the twenty largest creditors. The objective of the Bankruptcy Code is to provide a legal framework to enable interested parties to mutually pursue diverse goals. While the Bankruptcy Code places bonds in a single class, indenture agreements of specific bonds may delineate intrabond seniority and bankruptcy payment priorities. Managers of a bankrupt company accede certain powers to the bankruptcy judge and to creditors. The debt burden was the prima facie cause of the bankruptcy.
