The site I took that from explains the diagram as follows:
So, too, if courts were to interpret the "efficient market" reference in the Till footnote to be satisfied only upon a showing that chapter 11 debtors have access to an idealized, perfectly competitive market, it is unlikely that debtors would ever lose a cram-up litigation. And why then would we need to give creditors disclosure or let them vote?
Is this what the justices in the Till plurality opinion meant by an “efficient market”? Even though it was signed by the left wing of the Court, I think not. It would be disingenuous for a lawmaker in a republic, where the citizenry is supposed to be sovereign, to impose a criteria of perfection for exemption from governmental action without saying so, and perhaps also making clear that the lawmaker was aware of the difficulty of human beings achieving perfection.
Secondly, more specifically in the context of chapter 11 of the Bankruptcy Code, it is a law that largely addresses relationships of a private, commercial nature, where all issues are decided by a preponderance of the evidence. In that realm, I would expect the Court to impose nothing more stringent than a commercially reasonable perspective, much as they justified the prime-plus formula in Till itself on pragmatic, administrative grounds.
5) in the context of financial markets, if no single investor’s judgments about the price-information relationship can be expected to systematically outperform the rest of the market over the long term, then it is unlikely single bankruptcy judges should be expected to do better than the market in putting a price on credit risk.