Supreme Court Weighs Granting Cert on Bankruptcy Issues Involving Surcharge and Voting Rights of Assignee of Insider Claim
December 5, 2016
Authored by: Jay Krystinik
The Supreme Court is considering whether to grant review of two bankruptcy cases. On October 3, 2016, the Supreme Court invited the Solicitor General to file briefs expressing the views of the United States. Because the Supreme Court’s justices normally give significant weight to the federal government’s recommendations regarding interpretations of federal statutes (here, the Bankruptcy Code), the Solicitor General’s forthcoming briefs could influence whether the Supreme Court grants cert. on the two notable bankruptcy cases.
Southwest Securities v. Segner
The first case under consideration is Southwest Securities v. Segner (In re Domistyle, Inc.), 811 F.3d 691 (5th Cir. 2015). At the commencement of this case, the trustee believed the debtor possessed equity in certain real property that could benefit unsecured creditors. Id. at 693-94. The property was encumbered by Southwest Securities’ lien. After marketing the property for a year, the trustee was unable to sell the property and ultimately abandoned it