Justices Scalia and Kennedy — Their Impact on Bankruptcy Court Authority

By Donald L. Swanson Two long-standing members of the U.S. Supreme Court—each served three decades—are recently departed from the Bench: Justice Antonin Scalia served from September 26, 1986, until his death on February 13, 2016; and Justice Anthony Kennedy served from February 18, 1988, until his retirement on July 31, 2018. Both of these Justices had... Continue Reading →

The Constitution’s Bankruptcy Clause — A Struggle for Judicial Recognition

By: Donald L Swanson Bankruptcy laws in these United States have always struggled for acceptance by the judiciary. Judicial Restrictions on Congress’s Bankruptcy Power Federal courts, in many respects since 1800, have tried to restrict the bankruptcy power granted to Congress by the U.S. Constitution [Fn. 1]. For example: --In the 1800s and early 1900s, courts... Continue Reading →

Unbridled Credit-Bidding vs. Maximizing Value: U.S. Supreme Court and First Circuit Cases

By: Donald L. Swanson Imagine you’re at an auction and multiple parties are bidding on an item.  At a certain price, all bidders drop out except two.  These two keep bidding, and the price goes up. One bidder finally prevails—at a very high price. This happens.  It’s called competitive bidding at a fair auction.  This... Continue Reading →

Fraudulent Transfer Claims — In Constitutional Limbo

By: Donald L. Swanson “we assume without deciding, that the fraudulent conveyance claims in this case are Stern claims.” [Fn. 1] From unanimous U.S. Supreme Court decision in Executive Benefits Insurance Agency v Arkison (Decided June 6, 2014). [Fn. 2] It’s a curious thing, this failure-to-decide the constitutional status of fraudulent transfer claims in bankruptcy. Here’s... Continue Reading →

The Constitution’s “Bankruptcies” Clause: Assumed but Not Discussed or Cited in U.S. Supreme Court Bankruptcy Opinions

By: Donald L Swanson “It’s assumed.” That's the answer I heard, recently, to this question: “Why does the U.S. Supreme Court fail to discuss, or even cite, the ‘Bankruptcies’ clause of the U.S. Constitution when it decides constitutional questions of bankruptcy law?” [Fn. 1] Say what?!  Let’s get this straight: The U.S. Constitution has a clause empowering... Continue Reading →

Contract Rejection Damages as Administrative Claims in Bankruptcy

By: Donald L. Swanson “What is at issue for these parties, practically speaking, is whether to classify as prepetition or post-petition liability any damages caused by Debtor’s failure to honor its executory obligations.” --U.S. First Circuit Court of Appeals in Mission Product Holdings v. Tempnology, LLC., Case No. 16-9016 (1/12/2018), at 14. Current Posture Mission v.... Continue Reading →

Dewsnup Needs to be Overturned: It’s Out of Touch and Based on a Bizarre Foundation (But U.S. Supreme Court Passes)

By: Donald L. Swanson The U.S. Supreme Court’s Dewsnup v. Timm opinion (502 U.S. 410 (1992)) was wrongly decided and needs to be overturned. Unfortunately, that's not going to happen any time soon, since the U.S. Supreme Court denied certiorari on Tuesday (February 19, 2019) in the case of Ritter v. Brady, Supreme Court Case No. 18-747.... Continue Reading →

Correcting a Defect in Chapter 7: New Effort to Overturn Dewsnup v. Timm

By: Donald L. Swanson You know how bankruptcy debtors can strip-away out-of-money liens in Chapters 11, 12 and 13, using 11 U.S.C. § 506? Well . . . they can’t do it in Chapter 7. That’s because of a screw-up by the U.S. Supreme Court in an early opinion under the Bankruptcy Code—the opinion is Dewsnup... Continue Reading →

Can You Be Held in Contempt for Obeying a Court Order? The U.S. Supreme Court Will Decide (Taggart v. Lorenzen)

By: Donald L. Swanson A Hypothetical: You’ve sued an individual in state court for injunctive and other relief. Your defendant then files bankruptcy and receives a Chapter 7 discharge. Then, you ask the state court to determine that you can proceed with the lawsuit, despite the bankruptcy discharge. The state court says you can, and so... Continue Reading →

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