JUDICIAL CHRONICLE OF A LEGISLATIVE BLUNDER. SECTION 90.1.6 OF THE BANKRUPTCY ACT.

Abstract

The wording of section 90.1.6 of the Bankruptcy Act is causing serious practical problems and conflicting judicial decisions stemming from the difficulty of interpreting the text. The problem mainly resides in ascertaining what the legislators who wrote the section were referring to, or what they meant to refer to: pledges of future loans (corrective interpretation) or pledges securing future loans (literal interpretation). A reform that does a better job at explaining how to deal with pledges in meetings of creditors is required.