Is the rule in Gibbs justifiable in the context of modern international insolvency laws or is England clinging to an outdated rule simply to keep restructurings here? The rule stems from an 1890 Court of Appeal Case, which holds that only English courts can validate the compromise or discharge of English law governed debt. The rule cuts across the trend of increased cross-border cooperation in insolvency matters – commonly described as the “modified universalist” approach and critics see the rule as a relic of a more Anglo-centric approach to insolvency law.
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:
What do Ukraine, Sri Lanka, and Ghana have in common? They’ve all guaranteed bonds that once traded at a sizeable discount to their sovereign counterparts.
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:
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: