This week’s unanimous Supreme Court decision barring the strip off of wholly unsecured junior liens in chapter 7 cases is one of the stranger recent opinions of the Court.  See Bank of America, N.A. v. Caulkett, No. 13-1421, ___ U.S. ___ (June 1, 2015).  While the result is not particularly surprising, what is unusual is that the Court goes out of its way to question its two decades old decision inDewsnup and may even be hinting that it is ready to overrule that decision.  See Dewsnup v. Timm,502 U.S. 410 (1992).

A collective sigh of relief was the main effect of this week’s much-awaited Supreme Court decision on bankruptcy jurisdiction in Wellness International Network, Ltd. v. Sharif, No. 13-935, ___ U.S.___ (May 26, 2015, Sotomayor, J.). While a number of minor issues remain, the majority’s ruling that bankruptcy judges can issue judgments and final orders with the parties’ consent means that the current bankruptcy system can continue to function normally.

In a little-noticed November opinion, the Seventh Circuit greatly expanded the ability of a bankruptcy trustee to avoid a security interest for documentation errors under section 544(a)(1) of the Bankruptcy Code.  See State Bank of Toulon v. Covey (In re Duckworth), 776 F.3d 453 (7th Cir. 2014).

Last week’s Supreme Court arguments on bankruptcy jurisdiction in Wellness Int’l Network Ltd. v. Sharif, No. 13-935 (S.Ct.), are enough to strike fear into the heart of any bankruptcy buff. What emerges from the transcript of the oral arguments is, in a word, confusion. This bodes ill for an early resolution of the upheaval created by the Supreme Court’s decision in Stern v. Marshall, ___ U.S. ___, 131 S.Ct. 2594 (2011), limiting the power of bankruptcy judges to decide certain matters that arise in bankruptcy proceedings.

Aereo, Inc. will be permitted to auction off its live television streaming technology to the highest bidder in accordance with a December 24 order, signed by a New York bankruptcy court judge, approving a deal between Aereo and the broadcast television networks on the sale process.  

More than seven years is a long time to wait for a loaned painting to be returned. But after such a long wait, Sandro Botticelli’s Madonna and Child (1485) is being returned to its owner, Kraken Investments Limited (Kraken).   Kraken had consigned the painting to a gallery for sale, but the gallery’s bankruptcy intervened.

Introduction: the New Guidelines in the Context of the State Aid Modernization Program

On October 31, 2014, Bankruptcy Judge Kaplan of the District of New Jersey addressed two issues critically important to intellectual property licensees and purchasers: (i) can a trademark  licensee use section 365(n) of the Bankruptcy Code to keep licensed marks following a  debtor-licensor’s rejection of a license agreement?; and (ii) can a “free and clear” sale of  intellectual property eliminate any rights retained by a licensee? In re Crumbs Bake Shop, Inc., et  al., 2014 WL 5508177 (Bankr. D.N.J. Oct. 31, 2014).

Plans of Adjustment were confirmed recently in each of the landmark Detroit, MI and Stockton, CA bankruptcy cases. Although both cases shared many common legal issues, they took different paths to reach confirmation. Detroit, which resolved its cases by entering into settlements with its major constituents, provides a potential roadmap for future cases but only limited judicial guidance. Stockton provides more judicial precedent. For municipalities and their creditors, however, the lessons learned from the two cases will surely influence future Chapter 9 proceedings.

It’s always risky when the Supreme Court grants certiorari in a bankruptcy case. While the Court’s opinion may bring clarity to the narrow question upon which certiorari was granted, it often creates a host of unintended problems in other areas.