“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:

The Bankruptcy Protector

In Enter. Bank v. The Ingros Fam. LLC, et al., 2022 WL 2283392 (Bankr. W.D. Pa. June 23, 2022), a lender faced a potentially costly decision when it mistakenly left the word “The” from a borrower’s name.

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

Is the § 363(m) limit on appeal of a sale order “subject to waiver”?

That’s the essential question before the U.S. Supreme Court in MOAC Mall Holdings LLC v. Transform Holdco LLC, Case No. 21-1270 (certiorari granted June 27, 2022).

A deep circuit split exists on whether the § 363(m) limitation is, (i) on an appellate court’s jurisdiction, or (ii) on remedies an appellate court can provide.[Fn. 1]