Supreme Court to Rule on Waiver of Sovereign Immunity for Suits Under Section 544(b)(1)
To resolve a circuit split, the Supreme Court has agreed to decide whether a trustee can sue the government to recover a fraudulent transfer under state law when sovereign immunity would bar an ‘actual creditor’ from suing.
Supreme Court Reverses Purdue: No Nondebtor, Third-Party, Nonconsensual Releases
Justice Gorsuch for the majority bans third-party releases broader than a discharge for those who don’t surrender all their assets to the court.
Misleading Ads to Poach a Debtor’s Customers Is No Stay Violation, Circuit Says
The Second Circuit gives competitors license to mount false advertising unless it’s ‘virtually certain’ to affect a debtor’s customer contracts or goodwill.
Payments Made with Insurance Nevertheless Were Preferences, District Judge Says
Payments from insurance must be properly structured to avoid preference liability.
On a Circuit Split, First Circuit BAP Enforces Deadlines for Joining Involuntary Petitions
The circuits are split on whether a creditor has an ‘unfettered’ right to join as an involuntary petitioner.
As Subsequent Transferees, Churches Must Cough Up Fraudulent Transfers
Judge Huennekens explained that a church’s immunity for receipt of a constructively fraudulent transfer only applies if the transferor was an individual and the transferor was the debtor.
Discharge Injunction Violations Can’t Be Heard in Federal District Court
Circuits are split on whether claims for contempt of the discharge injunction must be brought in the bankruptcy court that issued the discharge.
Corporate Debts in Sub V Can Be Nondischargeable, Judge Says, Differing with His BAP
Bankruptcy Judge Hercher agreed with the results in the Fourth and Fifth Circuits but disagreed with some of the appeals courts’ logic.
An ‘Admin’ Claim Isn’t Mandated for Nonpayment of Rent Before Automatic Rejection
To align with congressional intent underpinning Section 365(d)(3), Judge Gravelle gave the landlord an administrative claim for base rent due after filing and before automatic rejection.
No Refunds for Overpayment of Unconstitutional U.S. Trustee Fees, Supreme Court Rules
Saying that the constitutional infirmity was “small” and “short-lived,” the majority decided that prospective relief was enough because Congress subsequently enacted a law mandating uniformity in the future with regard to fees for U.S. Trustees and Bankruptcy Administrators