In a recent decision, Judge David Novak of the US District Court for the Eastern District of Virginia vacated the Chapter 11 plan confirmation order entered by the bankruptcy court in the Mahwah Bergen Retail Group (formerly known as Ascena Retail Group) case, holding that the plan’s non-consensual third-party releases were unenforceable.1 The ruling arrived shortly after an
The Supreme Court confirmed parties' freedom to contractually modify any of the prerequisites for set-off under Bulgarian law, thus permitting various quasi-security arrangements in commercial and financial contracts that creditors may avail themselves of.
Prerequisites for statutory set-off in Bulgaria
Deepening a split of circuits, the First Circuit Court of Appeals held that the Bankruptcy Code waived the sovereign immunity of Native American Tribes. The May 6, 2022 opinion by Judge Sandra L.
A discharge in bankruptcy usually discharges a debtor from the debtor’s liabilities. Section 523 of the Bankruptcy Code, however, sets forth certain exceptions to this policy, including for “any debt . . . for money, property, services, or an extension, renewal, or refinancing of credit, to the extent obtained by . . . false pretenses, a false representation, or actual fraud. . . .” 11 U.S.C. § 523(a)(2)(A).
Courts Begin to Wrestle with the Impact of on a Debtor’s Ability to Recover Estate Property
In June 2019, the U.S. Supreme Court issued its unanimous decision in Taggart v. Lorenzen, through which it turned to general standards governing contempt outside of bankruptcy in holding a creditor may not be found in contempt for its failure to comply with a discharge injunction when a fair ground of doubt exists as to whether the creditor’s actions are wrongful. 139 S. Ct. 1795, 1799–1804 (2019).
On May 6, the U.S. Court of Appeals for the First Circuit reversed a district court’s decision, ruling that American tribes are not exempt from federal law barring suits against debtors once they file for bankruptcy.
Here are a couple long-standing and foundational policies for the entire bankruptcy system:
- Bankruptcy laws protect the honest but unfortunate debtor; and
- Discharge exceptions are to be strictly construed against the objecting creditor and liberally construed in favor of debtor.
So, for all my decades of practice under the Bankruptcy Code, this idea has held sway: an honest debtor is entitled to a bankruptcy discharge.
The U.S. Court of Appeals for the Fourth Circuit recently held that the “no fair ground of doubt” standard established by the Supreme Court of the United States in Taggart v. Lorenzen, a case involving alleged violation of a Chapter 7 discharge order, governed civil contempt proceedings for violation of a confirmed reorganization plan under Chapter 11.
Justice Stephen G. Breyer is set to retire from the U.S. Supreme Court in a few months.
But he’s not easing into retirement.
Instead, he’s out there swinging—fighting for his beliefs: trying to instruct / persuade current and future jurists on how the law should be applied.
Justice Breyer’s latest punch is a lone-dissent, against an eight-Justice majority, dated March 31, 2022. In this dissent, Justice Breyer explains his doctrine of statutory interpretation.
The Breyer Doctrine
Justice Breyer’s doctrine goes like this: