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 Article III. The Supreme Court has long held that Article I courts are limited to … Continue Reading
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 bankruptcy practice and litigation. Oil States Energy concerns the limits of Congress’s ability to create courts … Continue Reading
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. Earlier this year, ruling on an appeal from that decision, U.S. District Court Judge Leonard … Continue Reading
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 in bankruptcy as a capital contribution and treated as equity. The case raises important questions about … Continue Reading
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 parties under the plan. Judge Stark’s opinion demonstrates the extent to which the constitutional questions raised … Continue Reading
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 reduced the authority of bankruptcy courts, and bankruptcy judges and practitioners both have since been grappling … Continue Reading
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 four years ago. (If they do, it almost assuredly is only because the case arose … Continue Reading
Three years ago, in Stern v. Marshall, a case that arose out of the endless litigation between Anna Nicole Smith and the son of her late husband, the Supreme Court stunned the commercial legal community by reopening what many had believed were long-settled questions regarding the constitutionality of the United States bankruptcy courts. Although the … Continue Reading
The U.S. Supreme Court yesterday, in Executive Benefits Insurance Agency v. Arkinson, limited somewhat the ramifications of its landmark opinion two years ago in Stern v. Marshall. The Court in Executive Benefits could have thrown the entire federal bankruptcy court system into disarray by advancing Stern’s hard line view on the limited powers of Article … Continue Reading
Two years ago in Stern v Marshall, the Supreme Court surprised many observers by placing constitutional limits on the jurisdiction of the United States Bankruptcy Courts. The Court, in limiting the ability of a bankruptcy court judge to render a final judgment on a counterclaim against a party who had filed a claim against a debtor’s … Continue Reading
