Bankruptcy Laws Must (and do) Change With the Economy (Continental Illinois v. Chicago, Rock Island)

The tendency of legislation and of judicial interpretation has been uniformly in the direction of expanding the use of the bankruptcy power to meet the needs of an expanding economy.

U.S. Constitution’s “Bankruptcies” and “Contracts” Clauses: How They Work Together (In re Klein)

Our current bankruptcy system—with all its wisdom and shortcomings—is a culmination-to-date of the struggles and shortcomings and progress of generations past.

BAPCPA Nearly Backfires (Rose v. Portfolio — Cert. Denied)

A backfire (photo by Marilyn Swanson) By: Donald L Swanson “Backfire” = “to have the reverse of the desired or expected effect”  --from In 2005, the U.S. Congress decided to make life hard for individuals in bankruptcy.  Congress saw fraudulent intent in the minds of their destitute constituents—particularly those who had been living above the... Continue Reading →

A Supreme Court Civics Lesson: Separation of Powers And Appointments Clause For Puerto Rico

Map of Puerto Rico By: Donald L Swanson Mediation is playing a central role in Puerto Rico’s bankruptcy.  But mediating parties could not resolve an Appointments Clause dispute under the U.S. Constitution.  So, the U.S. Supreme Court recently resolved it for them. And the Supreme Court's decision is a welcome affirmation of the legitimacy of actions... Continue Reading →

The “Honest But Unfortunate Debtor”: An Old And Still-Evolving Concept

By: Donald L Swanson The phrase, “honest but unfortunate debtor," has been a part of bankruptcy laws for centuries. A bankruptcy treatise published in 1801, for example, says that bankruptcy laws in England and the U.S. "are meant to protect an honest but unfortunate trader." [Fn. 1] No one knows when or how the phrase began.... Continue Reading →

Don’t Guess Wrong on Finality for Appeal: Comparing U.S. Supreme Court Opinions (Rytzen and Bullard)

By: Donald L Swanson “An erroneous identification of a final order as interlocutory may cause a party to miss the appellate deadline.” --U.S. Supreme Court in Rytzen Group, Inc. v Jackson Masonry, LLC (decided 1/14/2020) Rarely has a Supreme Court bankruptcy ruling had a more-expansive effect that its most recent pronouncement. The quotation above shows why—because... Continue Reading →

Merit Management’s Footnote 2 and Justice Breyer’s Point Prevail in Second Circuit (In re Tribune)

By Donald L. Swanson “The parties here do not contend that either the debtor or petitioner in this case qualified as a “financial institution” by virtue of its status as a “customer” under §101(22)(A). . . . We therefore do not address what impact, if any, §101(22)(A) would have in the application of the §546(e) safe... Continue Reading →

Are US Trustee’s Increased Quarterly Fees Constitutional?

By: Donald L Swanson The Office of the US Trustee administers the bankruptcy system in these United States.  To fund its efforts, the US Trustee receives quarterly fees from Chapter 11 debtors, which fees are a major (and often a problematic) expense for debtor’s to pay. Back in October 2017, Congress increased the amounts of such... Continue Reading →

What To Do When No One Supports A Rule The U.S. Supreme Court Wants to Decide: Rodriguez v. FDIC

By: Donald L Swanson What should the U.S. Supreme Court Justices do when, (i) they grant certiorari to resolve a circuit split on whether a rule of law is valid, but (ii) no party to the appeal argues in favor of that rule? That’s exactly the circumstances in Rodriguez v. FDIC, Supreme Court Case No. 18-1269... Continue Reading →

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