Lack of Financial Distress Doesn’t Divest a Court of Subject Matter Jurisdiction

February 27, 2024

Lack of Financial Distress Doesn’t Divest a Court of Subject Matter Jurisdiction

Two North Carolina Courts have held within two months that the Bankruptcy Clause doesn’t demand ‘financial distress’ to establish subject matter jurisdiction.

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Opinion Link

View Opinion

https://abi-opinions.s3.amazonaws.com/Bestwall+jurisdiction.pdf

Case Details

Case Citation

In re Bestwall LLC, 17-31795 (Bankr. W.D.N.C. Feb. 21, 2024)

Case Name

In re Bestwall LLC

Case Type

Business

Court

4th Circuit

North Carolina

North Carolina Western District

Bankruptcy Tags

Automatic Stay

Bankruptcy Litigation

Corporate Governance

Creditors' Committee

Ethics

Plan Confirmation

Business Reorganization

Mass Torts

Comments

Submitted by davidkuney@dkun... on February 27, 2024 - 09:27

Key case, Bill. Thanks for posting. In my class at Georgetown Law School, I have introduced my students to what I call the "Existential trifecta," meaning three cases that will shape bankruptcy practice for decades--Purdue, Boy Scouts, and LTL. Bestwall is a variant of LTL and raises the same issue of financial distress and the scope of the Bankruptcy Power in the Constitution. I hope this case is addressed at Views from the Bench and the ABI Spring Meeting. Thanks for the great work you do on keeping us all posted.