Few issues in bankruptcy create as much contention as disputes regarding the right of setoff. This was recently highlighted by a decision in the chapter 11 case of Orexigen Therapeutics in the District of Delaware.  Judge Kevin Gross denied a
Continue Reading The Devil’s Triang(ular Setoff) – Delaware Judge Rejects Corporate Parent’s Attempt to Set Off Debt Owed to Subsidiary

The judicial power of the United States is vested in courts created under Article III of the Constitution. However, Congress created the current bankruptcy court system over 40 years ago pursuant to Article I of the Constitution rather than under
Continue Reading Square Peg / Round Hole – The Supreme Court and the Constitutional Authority of U.S. Bankruptcy Courts

The Supreme Court recently heard arguments in a patent dispute case, Oil States Energy Services, LLC v. Greene’s Energy Group, LLC.  Although the case has nothing to do with bankruptcy law, its outcome could have a substantial impact on
Continue Reading A Patent Law Dispute Before the Supreme Court This Term Could Have a Major Impact on U.S. Bankruptcy Courts

In December 2015, U.S. Bankruptcy Court Judge Laurie Silverstein of the District of Delaware confirmed a plan of reorganization in the Millennium Lab Holdings chapter 11 case that included the non-consensual release of certain claims against various non-debtor third parties. 
Continue Reading Judge Silverstein’s Opinion in Millennium Lab Holdings Threatens to Bring Clarity and Common Sense to Debate Regarding Constitutional Power of Bankruptcy Courts

The Supreme Court recently granted certiorari in PEM Entities LLC v. Levin, in which it will decide whether federal or a state law should apply when a debt claim held by a debtor’s insider is sought to be recharacterized
Continue Reading Could Supreme Court Case on Debt Recharacterization Provide a Pathway Out of the Stern v. Marshall Maze?

In Millennium Lab Holdings, Delaware District Court Judge Leonard Stark, on an appeal from a bankruptcy court order confirming a plan of reorganization, recently upheld a challenge to the bankruptcy court’s constitutional authority to release claims against non-debtor third
Continue Reading Millennium Lab Holdings – Ruling on Third Party Releases Highlights Continuing Constitutional Questions Regarding Power of Bankruptcy Courts

Four years ago, in Stern v. Marshall, the Supreme Court stunned many observers by re-visiting separation of powers issues regarding the jurisdiction of the United States bankruptcy courts that most legal scholars had viewed as long settled. Stern significantly
Continue Reading Supreme Court Decides to Maintain the Viability of the U.S. Bankruptcy Courts, But a Key Question Remains Unresolved

There were nearly a million bankruptcy cases filed by individuals and businesses in 2014.  It is safe to say that only the tiniest fraction of such debtors have any familiarity with the Supreme Court’s decision in Stern v. Marshall nearly
Continue Reading Wellness International Oral Argument: Supreme Court Justices Grapple With Implications of Narrowing Bankruptcy Court Powers