Govt. Claims/Sovereign Immunity

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.
Court: 
2nd Circuit›New York›New York Southern District

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.
Court: 
D.C. Circuit›District of Columbia

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.
Court: 
6th Circuit

Government Bar Date Applies to DOE Loans Even When the Servicer Is Private

As long as the student loan is owing to the government, the Fifth Circuit holds that the government bar date applies even when the servicer is a private company.
Court: 
5th Circuit

Government to Seek Supreme Court Review of Purdue’s Third-Party, Nondebtor Releases

In a motion to stay the issuance of the mandate, the government has announced that it will be filing a petition for certiorari asking the Supreme Court to review the Second Circuit’s Purdue decision allowing bankruptcy courts to issue releases to nondebtors. The Second Circuit’s May 30 decision reversed the district court and reinstated the bankruptcy court’s confirmation of the chapter 11 plan of Purdue Pharma LP. The New York-based court of appeals held that chapter 11 plans may include nonconsensual releases of creditors’ direct claims against nondebtors. Purdue Pharma LP v. City of Grand Prairie (In re Purdue Pharma LP), 69 F.4th (2d Cir. May 30, 2023). The motion filed by the government on July 7 states that “the [U.S.] Solicitor General has determined to seek review of the panel’s decision in the Supreme Court” before the August 28 deadline. The government’s motion characterized Purdue’s chapter 11 plan as giving absolute, unconditional and permanent releases “from every conceivable type of opioid-related civil” claims to members of the Sackler family that owned and controlled the company.

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