In Bartenwerfer v. Buckley, the Supreme Court of the United States resolved confusion in the lower courts over the scope and application of 11 U.S.C. § 523(a)(2)(A), which prohibits debtors from discharging debt through bankruptcy when such debt was obtained as a result of fraudulent actions.

BTI 2014 LLC v Sequana SA & Others [2022] UKSC 25

Factual Background

1. In December 2008 and May 2009, the directors of a UK limited company, known as Arjo Wiggins Appleton Limited (“AWA”) distributed dividends to its parent company and sole shareholder, the defendant in the claim, Sequana SA (“Sequana”). The dividend payment in May 2009 was just over £119m.

The U.S. Supreme Court issues its first-ever opinion—of any type—on August 3, 1791. [Fn. 1] But it does not address a bankruptcy question for quite some time thereafter. In fact, the first U.S. law on the subject of bankruptcy did not exist until the Bankruptcy Act of 1800.

First Bankruptcy Opinion

This week, the United States Supreme Court issued its opinion in Bartenwerfer v. Buckley, unanimously holding that a debtor cannot discharge a debt obtained by fraud even if the debtor himself/herself did not personally commit the fraud.

In a unanimous decision, the Supreme Court held that § 523(a)(2)(A) of the Bankruptcy Code precludes a debtor from discharging a debt obtained by fraud, regardless of the debtor’s own culpability. In Bartenwerfer v. Buckley, issued February 22, the Court concluded that “§ 523(a)(2)(A) turns on how the money was obtained, not who committed fraud to obtain it.”

On January 13, 2023, the U.S. Supreme Court grants the Petition for a writ of certiorari in Lac du Flambeau Band of Lake Superior Chippewa Indians v. Coughlin, Supreme Court Case No. 22-227, and on January 31, 2023, the Supreme Court enters this order therein: “Set for Argument on Monday, April 24, 2023.”

The phrase “projected disposable income” is a plan confirmation standard in all reorganization chapters of the Bankruptcy Code for individuals and businesses:

Bankruptcy benefits for individual debtors are a tough sell—always have been. That’s because no one likes bankruptcy—unless they need it.

But relieving people from debts in unfortunate circumstances is essential to our collective way of life in these United States. That’s always been true.

What follows is the third of three installments on some history of bankruptcy laws through the ages, beginning with ancient times—and to the present in these United States.

Bankruptcy Code

Recently, the National Company Law Appellate Tribunal (“NCLAT“), in the case of Dharmindra Constructions Private Limited and Anr. vs.

One year ago, we wrote that, in early 2021, it was widely anticipated that the unprecedented pressure the COVID-19 pandemic brought to bear on the U.S. economy would lead to a boom in corporate bankruptcy filings. That boom never materialized. Instead, business bankruptcy filings in the U.S. plummeted in 2021. That trend continued until the last quarter of 2022.