On May 26, 2015, continuing a springtime ritual for bankruptcy lawyers, the Supreme Court issued its latest “progeny of Stern” ruling on the adjudicative authority of the bankruptcy courts. In a 6-3 decision the Court held that “Our precedents make clear that litigants may validly consent to adjudication by the bankruptcy courts.” Wellness Int’l Network, Ltd. v. Sharif __ U.S. __ (May 26, 2015). This springtime ritual began four years ago when the Supreme Court…
Springtime is Stern Time
Litigant Consent and the Power of the Bankruptcy Court
The Supreme Court is currently considering the case of Wellness International Network, Ltd. v. Shariff. As discussed in the blog post on February 16, 2015, at issue in the Wellness International Network case is “whether Article III of the United States Constitution permits the exercise of judicial powers of the United States by the bankruptcy courts on the basis of litigant consent, and if so, whether implied consent based on a litigant’s conduct is sufficient…
Stern with a Twist: Supreme Court to Consider Constitutional Authority of Bankruptcy Courts
The Supreme Court has an opportunity to clarify the constitutionality of the allocation of power between federal district courts and bankruptcy courts. On July 1, 2014, the Supreme Court granted certiorari in Wellness International Network, Ltd. v. Sharif[1] to address the following: (1) Whether the presence of a subsidiary state property law issue in an 11 U.S.C. § 541 action brought against a debtor to determine whether property in the debtor’s possession is property of…
Christmas in July: Will Bankruptcy Lawyers Find a Lump of Coal in Their Stockings?
As spring rolls into summer, bankruptcy lawyers await the Supreme Court’s decision in Executive Benefits Insurance Agency v. Arkinson. With the Supreme Court’s term ending June 30, 2014, some wonder if the Court will, in fact, declare bankruptcy courts unconstitutional. While we are dreading the delivery of this potential lump of coal in our Christmas in July stocking, we here at KRCL will provide our readers with some brief background to this most anticipated of decisions from the…
Closing the Gap: The Supreme Court Holds that Bankruptcy Courts Should Enter Proposed Findings of Fact and Conclusions of Law for Stern Claims
On June 9, 2014, while the Bankruptcy Bar waited with bated breath, Justice Thomas delivered the long-anticipated opinion of the unanimous Court in Executive Benefits Insurance Agency v. Arkinson. While the Supreme Court answered the question of how to proceed when confronted with a Stern claim, it left the question of consent “for another day.” The Statutory Gap Identified in Stern Under 28 U.S.C. § 157(b)(1), Congress allocated to bankruptcy judges the power to hear…