District Judge Barred Redesignation to SBRA in a Case Pending 16 Months
Redesignation under the SBRA might become a hot topic once again when (if) Congress raises the cap back to $7.5 million.
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Supreme Court Hears Argument on Constitutionality of 2018 Increase in U.S. Trustee Fees
The Supreme Court heard oral argument on April 18 in a case to resolve a circuit split and decide whether the increase in fees payable to the U.S. Trustee system in 2018 violated the uniformity aspect of the Bankruptcy Clause of the Constitution because it was not immediately applicable in the two states that have Bankruptcy Administrators rather than U.S. Trustees, Rochelle’s Daily Wire reported today. See Siegel v. Fitzgerald, 21-441 (Sup. Ct.) (cert. granted Jan. 10, 2022). The government conceded at oral argument that the fees were up to seven times higher for several months in the two states with Bankruptcy Administrators. Still, the government contended that the fees were not substantive but were procedural and therefore did not offend the uniformity aspects of the Bankruptcy Clause. If the Court were to decide there was a constitutional violation, the government argued that the proper relief would not be refunds to the debtors in 48 states who paid more. Rather, the government contended that the proper relief would require debtors in the two states to reopen their cases and pay the higher fees by requiring disgorgement from creditors who had been paid more because the fees were lower.
Supreme Court Hears Argument on Constitutionality of 2018 Increase in U.S. Trustee Fees
At oral argument, the justices seemed more concerned about the remedy to give if the dual fee system was unconstitutional.
FishDish Proves that Ending Equitable Mootness Didn’t End the World as We Know It
Curtailing equitable mootness will benefit the bankruptcy community by fostering appellate decisions that clarify the standards for confirmation of chapter 11 plans.
Invoking Mirant, Fifth Circuit Permits Rejection of a Gas Pipeline Contract
Unsuccessfully attempting to punch homes in Mirant, FERC emerged from the Fifth Circuit with no power to stop bankruptcy courts from rejecting contracts otherwise within FERC’s jurisdiction.
Vermont's $36 Million Settlement with Purdue Pharma and Sacklers Moves Ahead
Vermont’s receipt of its share of a national settlement with Purdue Pharma and its owners, the Sackler family, cleared its first hurdle when the U.S. Bankruptcy Court for the Southern District of New York determined that the settlement did not violate the Bankruptcy Code, the Vermont Business Magazine reported. Under the settlement agreement, Vermont is to receive $36.4 million and up to an additional $1.454 million if certain conditions are met. The settlement is conditioned on the Second Circuit Court of Appeals overturning an earlier District Court. The result will be a nearly three-fold increase over the $12.58 million allocated to Vermont in Purdue’s original bankruptcy plan — a plan that Attorney General T.J. Donovan objected to and appealed in December 2021. Donovan has been fighting to hold the industry accountable for its role in promoting and profiting from the opioid crisis since 2017 when his office began investigating opioid manufacturers and distributors. The settlement with Purdue and the Sacklers, which Vermont agreed to in principle last week, follows last month’s final approval of a $64 million agreement with opioid distributors and Johnson & Johnson and a settlement of $1.5 million with McKinsey in 2021. The total amount of opioid settlements negotiated by Donovan is now more than $100 million for Vermont.