When an enforcement authority issues guidelines to its personnel for making enforcement decisions and makes those guidelines public, all who are subject to that authority should sit-up and take notice.
On June 10, 2022, the U.S. Trustee’s Office, Department of Justice, issues “Guidelines” to its personnel for enforcing rules on “Bifurcated Chapter 7 Fee Agreements.”[Fn. 1]
Here is an internal description on the nature of the guidelines (at 6):
“the specter of sanctions and contempt spawns ancillary litigation that often eclipses the issues at the heart of the underlying dispute.”
—From In re A.T. Reynolds & Sons, Inc., 452 B.R. 374, 376 (S.D.N.Y. 2011), reversing a Bankruptcy Court order of contempt and sanctions for lack of “good faith” in a mandated mediation.
The interface between federal bankruptcy law and similar state laws has a long history, going back to at least 1819, when the U.S. Supreme Court rules that a state insolvency law:
The interface between federal bankruptcy law and similar state laws has a long history, going back to at least 1819, when the U.S. Supreme Court rules that a state insolvency law:
Mediation-in-bankruptcy has been an effective tool for resolving mass tort cases.
That effectiveness has been for the benefit of all parties involved, such as:
“2 There is one inconsequential difference — § 1228(a) refers to debt ‘of a kind specified,’ while § 1192(2) refers to debt ‘of the kind specified.’” [Fn. 1]
This “inconsequential difference” quotation, from footnote 2 in the Fourth Circuit’s Cantwell v. Clearyopinion, is on the application of § 523 discharge exceptions to corporations and LLCs. The “inconsequential difference” quote, is both:
While the Czech government has not yet enacted the June 2019 EU Directive on restructuring and insolvency, it has proposed another debt relief measure, the Milostivé léto or 'Debt Jubilee'. This will give debtors the opportunity to discharge debts owed to the Czech state.
Background
The measure will provide relief for debts where interest repayments substantially exceed the principal amount. The measure follows on from the previous 'Debt Jubilee' between 28 October 2021 and 28 January 2022 when 42,000 debt enforcement proceedings were cancelled.
Justice Stephen G. Breyer is now retired from the U.S. Supreme Court, serving from August 3, 1994, to June 30, 2022.
One of his legacies—and an exceedingly important one—is this: he has worked, successfully, to erase “public rights” from the lexicon of controlling bankruptcy law.
What follows is a summary of how “public rights” came to be part of that lexicon, and how Justice Breyer works to get it erased.
“PUBLIC RIGHTS” BEGINNING—Northern Pipeline
The case before the U.S. Supreme Court is MOAC Mall Holdings LLC v. Transform Holdco LLC, Case No. 21-1270.
The bankruptcy question upon which the U.S. Supreme Court granted certiorari is this:
Both the Johnson & Johnson and InfoWars bankruptcies are filed to address tort lawsuits.
Johnson & Johnson’s bankruptcy survives a motions to dismiss.[Fn. 1] InfoWars’ bankruptcy doesn’t.[Fn. 2]
What follows is an effort to compare and contrast the two cases, revealing why one survives and the other doesn’t.
The Businesses
–Johnson & Johnson