SCOTUS Update
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Georgia Judge Approves a Chapter 11 Plan with Nonconsensual, Nondebtor Releases
Although the Supreme Court will soon rule on the permissibility of nonconsensual releases, Bankruptcy Judge Sigler approved a plan with nondebtor releases under existing Eleventh Circuit precedent.
U.S. Supreme Court Split over Government Liability for Credit Report Errors
U.S. Supreme Court justices appeared to be divided over whether the federal government can be sued over errors related to consumer credit reports as they considered a case involving a Pennsylvania man who accused an Agriculture Department agency of making mistakes that hurt his credit status, Reuters reported. The justices heard arguments in an appeal by President Joe Biden’s administration of a lower court’s ruling that a legal doctrine called sovereign immunity does not shield the U.S. government from liability in lawsuits concerning credit-reporting inaccuracies. The administration is seeking to block plaintiff Reginald Kirtz's lawsuit against the Rural Housing Service, an agency that furnishes loans to help lower-income Americans get housing in rural regions. Kirtz brought the suit seeking monetary damages under the Fair Credit Reporting Act. Questions posed by the justices indicated they were split over the matter. Kirtz has said his loans were repaid in full, but that the government lender and a separate private lender continued to wrongly report that his accounts were past due, even after he complained about the discrepancies. These false reports were then passed along to credit-reporting agency TransUnion and damaged Kirtz's creditworthiness, according to Kirtz. The Biden administration argued that the suit should be dismissed under the doctrine of sovereign immunity. At issue is whether Congress waived sovereign immunity in the Fair Credit Reporting Act.
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Michigan Judge Orders Stalled Edenville Flood Lawsuit to Proceed
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Debtor’s Subchapter S Status Is Estate Property that an Owner Can’t Terminate
Bankruptcy Judge Russin declines to follow the Third Circuit and adopts the conclusion of bankruptcy courts holding that Sub S status is estate property.
Foreign Sovereign Immunity Bars the Madoff Trustee from Recovering $20 Million
A district judge in New York reversed the bankruptcy court, which had held that a Kuwaiti public pension fund was not entitled to sovereign immunity for having engaged in commercial activity.
An FTC Suit Under the Sherman and FTC Acts Wasn’t Subject to the Automatic Stay
The ‘police and regulatory’ exception to the automatic stay applies when the FTC is only seeking injunctive and equitable relief, the D.C. Circuit says.
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Antitrust and Hospitals/Health Systems: Government Intransigence
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Three Circuits Agree: The ACA’s ‘Penalty’ Is Actually a Tax Entitled to Priority
Looking beyond the label assigned by the Affordable Care Act, three circuits have now held that failure to pay the ‘individual mandate’ for purchasing health insurance gave rise to a tax entitled to priority in bankruptcy.
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