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The Supreme Court today will hear oral arguments in the case of Wellness International Ltd. v. Sharif, which presents the latest opportunity for the Court to address the jurisdiction of the bankruptcy court. Certiorari was granted on July 1, 2014, from a Seventh Circuit decision. The court will hear argument on the following issues:

(1) Whether the presence of a subsidiary state property law issue in an 11 U.S.C. § 541 action brought against a debtor to determine whether property in the debtor's possession is property of the bankruptcy estate means that such action does not "stem[] from the bankruptcy itself" and therefore, that a bankruptcy court does not have the constitutional authority to enter a final order deciding that action; and
(2) whether Article III permits the exercise of the judicial powers of the U.S. by the bankruptcy courts on the basis of litigant consent, and if so, whether implied consent based on a litigant's conduct is sufficient to satisfy Article III.

For a full analysis of the issues to be considered in the case, be sure to read the analysis from the National Bankruptcy Conference.
https://drive.google.com/a/abiworld.org/file/d/0BzGxkXL_Y_oAekxHYWZYUVZ…

For additional perspective of the issues presented in the case, listen to the ABI Podcast featuring Prof. Ralph Brubaker of the University of Illinois College of Law discussing the case.
https://drive.google.com/a/abiworld.org/file/d/0BzGxkXL_Y_oAekxHYWZYUVZ…

For case details, including petitions and amicus briefs filed in the case, be sure to visit ABI's Court Opinions page in the Newsroom.
http://news.abi.org/supreme-court/wellness-international-network-limite…

For a review of the Circuit Court split on the issue, be sure to read this ABI Journal article.
http://journal.abi.org/sites/default/files/2013/october/practice.pdf

Unhappy creditors of Caesars Entertainment Corp., seeking to put the brakes on its planned reorganization, may have temporarily given the company more freedom to operate by pushing its main unit into an involuntary bankruptcy, Bloomberg News reported yesterday. Because the chapter 11 petition filed yesterday in Delaware wasn’t voluntary, the casino company doesn’t face immediate restrictions on selling or transferring assets, as it might otherwise under the Bankruptcy Code. Nor does Caesars need a bankruptcy judge’s permission to make other major decisions, said Bruce Grohsgal, a visiting professor of bankruptcy law at Widener University School of Law in Wilmington, Delaware. The creditors that filed the involuntary bankruptcy, Appaloosa Investment LP and funds affiliated with Oaktree Capital and Tennenbaum Capital, must persuade the judge to place restrictions on Caesars that are otherwise automatic in a voluntary case, Grohsgal said. The company has the right to fight those restrictions. Last year, a trustee for the same creditors sued Caesars, claiming the parent company was plundering the best assets of its main operating unit. That case and a similar lawsuit will now be automatically halted by the unit’s involuntary bankruptcy.

A bankruptcy judge Tuesday denied a proposal by defunct TV-streaming service Aereo Inc. to pay its remaining employees bonuses if the company is able to drum up at least $4 million from a sale of its technology, the Wall Street Journal reported today. The denial by Bankruptcy Judge Sean Lane followed objections by a group of major broadcasters who insist any sale of Aereo’s assets will infringe on their copyrights and by a government watchdog who said the bonuses don’t seem to be tied to adequate incentives. “The $4 million figure is of concern to me...given that at one point these assets were valued at $20.5 million,” Judge Lane said in court yesterday after listing several reasons why the bonuses don’t pass legal muster. He did leave open the possibility of approving a revised plan if it more clearly laid out why the employees deserve the extra money.

Mississippi pipe manufacturer PSL-North America LLC says it needs more time to divide the proceeds from its $104 million sale to India's Jindal Tubular, Dow Jones Daily Bankruptcy Review reported today. In a filing on Monday in U.S. Bankruptcy Court in Wilmington, Del., PSL said that it needs more time to hash out a consensual plan with creditors to winding down its business following the closing of the sale. PSL is requesting an additional three months, until April 13, to develop the plan. Without an extension of the exclusivity period, creditors and other parties could file competing plans, which at a minimum would complicate the confirmation of PSL's own plan.

UniTek Global Services, Inc. has emerged from chapter 11 with significantly less debt, supportive customers and vendors, and a focused strategy to provide infrastructure services to the satellite television, broadband cable, wireless telecommunications, transportation and public safety industries, the ABL Advisor reported today. The company announced new leadership with John Haggerty appointed to the position of interim Chief Executive Officer. Haggerty will succeed Rocky Romanella who successfully steered the Company through the chapter 11 process. UniTek is now majority-owned by New Mountain Finance Corporation and entities managed by Littlejohn & Co., LLC, both of whom have extensive private equity expertise, as well as deep relationships in the specialty contracting and fulfillment services industries.

A judge said on Monday that the three former leaders of defunct law firm Dewey & LeBoeuf — Steven Davis, Stephen DiCarmine and Joel Sanders — will head to court on April 27 to kick off a trial expected to last four to six months, the Wall Street Journal reported today. The three stand accused of accounting fraud as part of an alleged scheme to hide the true nature of Dewey’s financial condition in the run-up to the firm’s dramatic 2012 collapse. All three have maintained their innocence and are free on bail awaiting the trial.

Stockton’s appearances in federal bankruptcy court are not over yet, but they are becoming shorter, the Stockton Record reported today. The city’s lone dissident chapter 9 creditor, Franklin Templeton Investments, argued yesterday that Judge Christopher Klein should stay his October ruling that confirmed Stockton’s bankruptcy reorganization plan. Stockton argued to the contrary. At the end of a 60-minute hearing, Judge Klein said he would reveal his decision on the stay at another hearing next Tuesday.

A Kentucky company that’s brewing iced tea inspired by “Duck Dynasty’s” Uncle Si on the hit A&E reality TV show has filed for bankruptcy, accusing the show’s stars of breaking their promises to promote the beverage, the Wall Street Journal reported today. The beverage maker’s federal lawsuit against Duck Commander Inc. — the Robertson clan’s duck-call business in Louisiana — portrays the “Duck Dynasty” brand as growing too big, too soon. In the glow of the spotlight, Duck Commander has made dozens of licensing agreements to grow its brand. That includes a deal with Chinook USA LLC to make and distribute a beverage named for Uncle Si, who drinks from a bottomless cup of iced tea on the show. At least one branding expert said the Duck Commander family has too many products and trinkets, telling officials at the beverage maker that it’s “sad to walk through their retail store in Monroe and see all the junk they’ve licensed,” according to the suit. The over-scheduled Duck Commander family allegedly broke its contract to promote Uncle Si’s Iced Tea in media interviews and special appearances, according to the lawsuit. Si Robertson also failed to promote the tea on nationally televised morning shows, the lawsuit said.

The U.S. Supreme Court yesterday ruled in favor of homeowners seeking to back out of mortgages when lenders are accused of failing to follow a federal “truth in lending” law, Reuters reported yesterday. On a 9-0 vote, the court handed a win to an Eagan, Minnesota couple, Larry and Cheryle Jesinoski, over the $611,000 loan they obtained in 2007 from Countrywide Home Loans Inc., now part of Bank of America Corp. On the technical question before the justices, the court said that homeowners need only write a letter to the lender, as the Jesinoskis did, and do not need to file a lawsuit in order to benefit from a provision of a federal law known as the Truth in Lending Act. The law allows consumers to rescind a mortgage for up to three years after it was made if the lender does not notify them of various details about the loan including finance charges and interest rates. The Jesinoskis filed their notice right before the end of the three-year period and filed a lawsuit a year later after the bank said it was disputing the claim. The language of the law "leaves no doubt that rescission is effected when the borrower notifies the creditor of his intention to rescind," Justice Antonin Scalia wrote on behalf of the court.

A U.S. unit of China’s Suntech Power Holdings Corp., once the world’s largest solar-panel maker, followed its parent in seeking bankruptcy protection from creditors after increased competition pushed down prices, Bloomberg News reported yesterday. San Francisco-based Suntech America Inc., an affiliate of Wuxi, China-based Suntech Power, today listed more than $100 million each in assets and debt in chapter 11 filings in U.S. Bankruptcy Court in Wilmington, Delaware. Suntech Power, following creditor demands, filed for chapter 15 protection last February in Manhattan. U.S. bondholders moved to put the company into bankruptcy on their own with an involuntary bankruptcy liquidation under chapter 7 after it defaulted on about $541 million of their debt.