In 2011, the Supreme Court decided Stern v. Marshall, 564 U.S. ___, 131 S. Ct. 2594 (2011), which gave voice to the Court’s grave concerns about the constitutional limits of bankruptcy court jurisdiction and raised several questions that have confounded courts and lawyers for three years. Last week, the Supreme Court issued its first follow-up ruling, answering some of those questions and clarifying how bankruptcy courts are to handle so-called Stern claims. Despite that guidance, the opinion leaves several important questions unanswered.

Recoveries from fraudulent conveyance lawsuits can be a significant source of recovery for creditors of bankruptcy estates.  Because a plaintiff seeking to avoid a prepetition transfer as constructively fraudulent must demonstrate that the debtor was insolvent or inadequately capitalized at the time of the challenged transfer, valuation analyses that support allegations of insolvency are critical.

As expected (and predicted), the bankruptcy judge in Dallas, Texas granted Mt. Gox’s request for an order of “recognition” that the debtor’s Tokyo insolvency action was a “foreign main proceeding.” She will also allow Mt. Gox’s bankruptcy trustee, Nobuaki Kobayahsi, to act as the “foreign representative” of the debtor in connection with whatever relief it might seek in the Chapter 15 case.

The Order Re Summary Judgment issued on June 11, 2014 by Judge Charles R. Breyer of the U.S. District Court for the Northern District of California in the Heller Ehrman LLP bankruptcy case may prove to be a knock-out punch against “unfinished business” claims by insolvent or bankrupt law firms and their trustees.

Trademark Licenses At Risk. I have written a number of times on the blog about the impact of bankruptcy on trademark licenses, with a special focus on the risk that trademark licensees face if their licensors file bankruptcy.

Absolute Priority has regularly covered the impact of the Supreme Court’s decision in Stern v. Marshall on the world of bankruptcy litigation.  In Stern, the Supreme Court held that Article III of the United States Constitution prohibits bankruptcy courts from finally adjudicating certain “core” causes of action (often called “Stern claims”), notwithstanding Congress’s explicit grant of such power to the bankruptcy court.

On June 18, 2014, the U.S. Bankruptcy Court in Dallas will consider whether to grant recognition to the insolvency case pending in Tokyo. Based on the pleadings filed last week, it is a virtual certainty that the court will enter an order granting recognition.

The First Circuit held in a recent decision that bankruptcy courts have wide discretion to apply a flexible approach when valuing (and potentially re-valuing) collateral for purposes of determining whether a secured creditor is oversecured and therefore entitled to receive postpetition interest pursuant to section 506(b) of the Bankruptcy Code.   

The Stern v. Marshall Decision. In its 2011 decision in Stern v. Marshall, decided by a 5-4 vote, the U.S. Supreme Court held that even though Congress designated certain state law counterclaims as “core” proceedings, Article III of the U.S. Constitution prohibits bankruptcy courts from finally adjudicating those claims. Stern v.

A recent decision by Judge Shannon of the U.S. Bankruptcy Court in Delaware, In re Optim Energy, LLC, et al., No. 14-10262 (BLS) (Bankr. D. Del. May 13, 2014), highlights a shift in Delaware recharacterization jurisprudence.