In an opinion issued on January 13, 2022, Judge David Novak of the United States District Court for the Eastern District of Virginia struck down non-consensual third-party releases [2] from a plan confirmed by the bankruptcy court.
The Supreme Court ruled unanimously yesterday that 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 with Bankruptcy Administrators rather than U.S. Trustees, according to a special edition of Rochelle's Daily Wire. The opinion for the Court by Justice Sonia Sotomayor said that the Uniformity Clause “is not a straightjacket: Congress retains flexibility to craft legislation that responds to different regional circumstances that arise in the bankruptcy system.” She remanded for lower courts to determine the proper remedy. Although Justice Sotomayor pointedly said that her opinion “does not today address the constitutionality of the dual scheme of the bankruptcy system itself,” some of her language could be read to imply that the dual system is constitutionally questionable. Read the full column.
ABI is organizing a special webinar on Thursday, June 9, at 1 p.m. ET to examine the Supreme Court’s decision in Siegel v. Fitzgerald. Look for a complimentary registration link to be available today on ABI social media and in tomorrow’s Daily Headlines e-mail.
On March 7, 2022, the U.S. Supreme Court in Estate of Omar Fontana v. ACFB Administração Judicial Ltda.-ME, No. 21-828 (U.S. Mar. 7, 2022), denied a petition for review of a decision by the Eleventh Circuit, In re Transbrasil S.A. Linhas Aéreas, 860 Fed. Appx 166 (11th Cir. 2021). The Eleventh Circuit held that an order denying a motion for a protective order to shield parties from discovery subpoenas in a chapter 15 proceeding was interlocutory and thus not final and appealable. [1]
A chapter 13 bankruptcy allows a defaulted homeowner the unique benefit of saving real property, along with other secured debt. Given the benefits of chapter 13, this particular type of bankruptcy has the ability to help a large mass of people, and as such requires an orderly administration. Chapter 13 Trustees — guided by Code provisions and bankruptcy rules — are the gatekeepers for this administration. While these trustees do a remarkable job in ensuring that debtors, creditors and other entities comply with procedural requirements, occasional oversights are expected.