This is the fourth in a series of four articles on why Fed.R.Bankr.P. 9031, titled “Masters Not Authorized,” needs to be amended to authorize the utilization of special masters in complex bankruptcy cases.
The focus of this fourth article is on how federal courts have inherent authority to appoint special masters—and why that inherent authority should not be denied in bankruptcy cases.[Fn. 1]
Inherent Authority of Courts of Equity
The Hong Kong High Court has given a rare order for modifications to a scheme of arrangement after it had been implemented incorrectly by the scheme administrators. Drawing on instances in which the English courts have sanctioned modifications after approval by scheme creditors, the court held that the same principles apply here.
This is the third in a series of four articles on why Fed.R.Bankr.P. 9031, titled “Masters Not Authorized,” needs to be amended to authorize the utilization of special masters in complex bankruptcy cases.
The focus of this third article is on how the evolution of the old bankruptcy referees into today’s bankruptcy courts shows why special masters are needed in complex bankruptcy cases—and should not have been prohibited.[Fn. 1]
The Evolution of Bankruptcy
This is the second in a series of four articles on why Fed.R.Bankr.P. 9031, titled “Masters Not Authorized,” needs to be amended to authorize the utilization of special masters in complex bankruptcy cases.
The focus of this second article is on how the exclusion of special masters from bankruptcy cases: (i) is without a sound reason, and (ii) is based on a history of haste and uncertainty.[Fn. 1]
Bankruptcy Rule 9031—The Prohibition
This is the first in a series of four articles on why Fed.R.Bankr.P. 9031, titled “Masters Not Authorized,” needs to be amended to authorize the utilization of special masters in complex bankruptcy cases.
The focus of this first article is on how special masters are already utilized, effectively, by federal district courts under Fed.R.Civ.P. 53 (titled, “Masters”).[Fn. 1]
Special Masters in Federal Courts
–A Brief History
A Hong Kong court has rejected a bid to force liquidators to provide information and documents regarding their plans and strategies on related litigation as well as information on legal costs and funding arrangements.
Can the contempt remedy for a creditor’s violations of the discharge injunction in multiple bankruptcy cases throughout the land be imposed in a class action lawsuit?
Here’s a due process question that’s percolating before the U.S. Supreme Court and a related mediation issue:
A helpful analysis of statute of limitations issues for fraudulent transfer claims brought by a bankruptcy trustee under § 544(a)&(b) is provided in a recent Circuit opinion.
- The opinion is Lewis v. Takacs (In re Stone Pine Investment Banking, LLC), Case No. 21-1423, U.S. Tenth Circuit Court of Appeals (decided 12/19/2023).
Overview
You can’t make this stuff up. The legal issues are pedestrian. But the facts behind those issues are incredible!
Litigation History
Here’s the boring stuff first.
On January 8, 2024, the U.S. Supreme Court denies certiorari in Mann v. LSQ Funding Group, L.C. (Case No. 23-425). Here’s the procedural background: