Bellingham-Stern Issues Continue at the Supreme Court

The Supreme Court yesterday issued cert in a 7th Circuit case called Wellness International Network v. Sharif.  It looks like a much more direct attack on the powers of bankruptcy courts than Bellingham.

In Wellness, the creditor sued the chapter 7 debtor to deny the discharge and also for declaratory relief asking the bankruptcy court to find that a certain trust was the alter ego of the debtor and therefore the assets were property of the estate.  The creditor won.  The debtor appealed for the first time saying that the bankruptcy court could not enter final judgment because this was a Stern-type claim.  The district court said, too late buddy, you waived the argument i.e. you consented to the bankruptcy court.  The 7th Circuit reversed saying that the bankruptcy court could not enter final judgment on the alter ego issue and that that could not be waived.

I am sure we will discuss this at the July 19 cdcbaa with Prof. Pottow and Judges Paez and Jury.

We have about 50 rsvps for the July 19 program.  I am going to send out the flyer today or tomorrow and expect many more sign ups.  We can only allow 130 persons to attend so please rsvp if you are coming. Remember, telling me you’re coming does not do you any good.  You have to rsvp.

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