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Did Law v. Siegel Sound the Death Knell for the Equity Powers of the Bankruptcy Court?

posted by Adam Levitin

Did Law v. Siegel Sound the Death Knell for the Equity Powers of the Bankruptcy Court?  Mark Berman thinks so.  I'm skeptical (fuller version of my argument here).  But it depends what we mean when we refer to "equity", which is often used as a rubric for an array of different non-Code practices.  More complete coverage at the Harvard Law School Bankruptcy Roundtable.

Comments

Can Law v Siegel be harmonized with Executive Benefits to forbid successor liability injunctions?

Law v Siegel held:

Section 105(a) confers authority to “carry out” the provisions of the Code, but it is quite impossible to do that by taking action that the Code prohibits. That is simply an application of the axiom that a statute’s general permission to take actions of a certain type must yield to a specific prohibition found elsewhere.
( page 7 of the Slip Opinion)


Executive Benefits held:

By definition, a Stern claim may not be adjudicated to final judgment by the bankruptcy court, as in a typical core proceeding.
( page 9 of the Slip Opinion)

Then isn’t it also quite impossible to carry out provisions of the Code by enjoining something the bankruptcy court can not decide, like a successor liability or fraudulent conveyance action between third parties?

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