New Cases For the Week of December 26, 2011 - December 30, 2011

 

December 29, 2011

In re Apex Long Term Acute Care
(DBN)
Bankr. SD TX

The resolution of certain fundamental bankruptcy issues falls within the public rights doctrine. Although the Supreme Court has never decided the question, it noted in dicta in Northern Pipeline that "the restructuring of debtor-creditor relations may well be a `public right.' The Court's ruling in Stern explicitly did not reconsider the public rights framework for bankruptcy, and it did emphasize that its ruling was "narrow".

As to which matters are "fundamental" in bankruptcy (and thus must be "public rights"), the court finds that critical features of every bankruptcy proceeding are the exercise of exclusive jurisdiction over all of the debtor's property, the equitable distribution of that property among the debtor's creditors, and the ultimate discharge that gives the debtor a `fresh start' by releasing him, her, or it from further liability for old debts.

Since: (i) disputed matters routinely arise in these fundamental areas, (ii) such disputes could only be finally decided by non-Article III judges under the public rights doctrine, and (iii) the Supreme Court appears to be believe that bankruptcy courts do have the jurisdiction to operate day-to-day to finally adjudicate matters in the bankruptcy arena, these "fundamental" areas must ipso facto be areas of "public rights." Elsewise, bankruptcy courts would lack the practical ability to operate with finality with respect to fundamental bankruptcy issues.

     

December 28, 2011

In re MF Global Inc.
(DBN)
Bankr. SD NY After filing additional court-ordered disinterestedness disclosures, the SIPA trustee is determined to be presently disinterested. The trustee's law firm has represented, and continues to represent some potential litigation targets of the estate. If it becomes necessary to investigate and/or litigate with such present or former clients, it may be necessary to appoint conflicts counsel or a co-trustee to handle such work.
     
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