Business Law

Business Law Annual Review ISSUE 1, 2024 (ANNUAL REVIEW)

RECENT DEVELOPMENTS IN INSOLVENCY LAW 2023

Written by Thomas R. Phinney and Paul J. Pascuzzi*

Welcome to the ninth annual edition of our article covering recent developments in bankruptcy law. We provide a summary of the facts, issues, and holdings from a mix of ten recent important and interesting bankruptcy decisions. In some cases, for simplicity and brevity, the facts are simplified. Unless otherwise noted, all references are to the Bankruptcy Code or Federal Rules of Bankruptcy Procedure.

1. BANKRUPTCY CODE UNAMBIGUOUSLY ABROGATES SOVEREIGN IMMUNITY OF ALL GOVERNMENTS, INCLUDING FEDERALLY RECOGNIZED INDIAN TRIBES: LAC DU FLAMBEAU BAND OF LAKE SUPERIOR CHIPPEWA INDIANS V. COUGHLIN, 599 US -, 143 S. CT. 1689 (2023).

Bankruptcy Code section 106(a) expressly abrogates the sovereign immunity of a "governmental unit" for specified purposes. That section says, "[n]otwithstanding an assertion of sovereign immunity, sovereign immunity is abrogated as to a governmental unit to the extent set forth in this section." Section 106(a) enumerates a list of Bankruptcy Code provisions to which the abrogation applies, including section 362 (governing the automatic stay). The question for the Supreme Court in this case was whether that express abrogation extends to federally recognized Indian tribes.

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