Most justices seemed inclined to believe that the waiver of sovereign immunity in Section 106(a) does not abrogate the “actual creditor” requirement in 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.
Bankruptcy Judge Scott Clarkson nailed the government with $38,000 in sanctions for a ‘willful’ violation of a discovery order shown by ‘clear and convincing evidence.’