There is NO Split of Authority on Make-Whole Premiums Between the Second and Third Circuits

By Donald L. Swanson The consensus I’ve been reading these days is that a split of authority is shaping up between the Second and Third Circuit Courts of Appeals on enforcability of make-whole premiums in bankruptcy. --The first of two cases is from the Third Circuit: In re Energy Future Holdings Corp., 842 F.3d 247 (3rd... Continue Reading →

A Surprise Development at U.S. Supreme Court in Oral Arguments on Merit Management v. FTI Consulting

By: Donald L. Swanson The case before the U.S. Supreme Court is Merit Management Group, LP v. FTI Consulting, Inc., Case No. 16-784. The bankruptcy question is whether the § 546(e) safe harbor prohibits avoidance of a transfer made through a financial institution as escrow agent. Oral arguments occurred on November 6, 2017 [Footnote 1]. Justice... Continue Reading →

Oddities at U.S. Supreme Court Continue in Oral Arguments on U.S. Bank v. Lakeridge

By:  Donald L. Swanson The U.S. Supreme Court has already dismissed one bankruptcy appeal this term as “improvidently granted.”  This is an oddity. And it should have also dismissed U.S. Bank National Association v. Village at Lakeridge, Case No. 15-1509, for the same reason. Instead, the Court held oral arguments in the Lakeridge case on... Continue Reading →

Recovering Tax Payments From IRS as Fraudulent Transfers (§ 544(b)): The “Actual Creditor” Issue

By: Donald L. Swanson The fact scenario is this. An S corporation pays its own taxes each year. Then it files bankruptcy. So, the bankruptcy trustee sues the IRS for recovery of those tax payments as fraudulent transfers.  It does so under two different sections of the Bankruptcy Code: (i) Under § 548, for payments within... Continue Reading →

Puerto Rico is a “State” under U.S. Bankruptcy Law: Foreshadowing Bankruptcy-Type Relief for Other “States”?

By Donald L. Swanson "We must decide whether Puerto Rico is a “State” for purposes of this [bankruptcy] pre-emption provision. We hold that it is." --Commonwealth of Puerto Rico v. Franklin California Tax-Free Trust, U.S. Supreme Court Case No. 15-233 (Decided June 13, 2016). The Bankruptcy Code definition of "State" is contained in Sec. 101(52) and... Continue Reading →

What’s With Puerto Rico and Its Relationship to the USA?

By Donald L. Swanson Have you ever wondered about the nature and history of Puerto Rico's relationship with the United States of America? After all, it’s located 1,600 miles beyond Miami and is separated from the U.S. mainland by the likes of Cuba, Bahamas, Turks and Caicos Islands, Haiti and Dominican Republic. So . .... Continue Reading →

“Public Rights” Doctrine for Bankruptcy Court Jurisdiction, While Always Tenuous, Is Now Dead and Buried

By Donald L. Swanson "Public rights" doctrine enters the bankruptcy scene thirty five years ago in the four-Justice plurality opinion of Northern Pipeline v. Marathon Pipe Line, 458 U.S. 50 (1982). Three Justices in that case write an vigorous dissent to such a use of public rights doctrine, while two other Justices concur with the... Continue Reading →

Why Bankruptcy Judges Have a 14-Year Term, Instead of Life Tenure (From Justice White in Northern Pipeline v. Marathon)

By Donald L. Swanson Have you ever wondered why Congress, when it adopted the Bankruptcy Code in 1978, limited the term of service for bankruptcy judges to fourteen years? --This term limitation, established in 28 U.S.C. Sec. 157(a)(1), assures that bankruptcy judges are serving as Article I judges under the U.S. Constitution. Life tenure would... Continue Reading →

Justice Gorsuch’s First Supreme Court Dissent is Scaliaesque on Statute Construction but Non-Scalia on Public Rights Doctrine (Perry v. Merit Systems)

By Donald L. Swanson On June 23, 2017, Neil Gorsuch issues his first dissenting opinion as a Supreme Court Justice. The case is Perry v. Merit Systems Protection Board (Supreme Court Case No. 16-399). It's about statutory procedures for litigating Federal employee claims.  The dissent by Justice Gorsuch illuminates a comparison of ideas with those... Continue Reading →

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