Supreme Court to Rule on Waiver of Sovereign Immunity for Suits Under Section 544(b)(1)

July 1, 2024

Supreme Court to Rule on Waiver of Sovereign Immunity for Suits Under Section 544(b)(1)

To resolve a circuit split, the Supreme Court has agreed to decide whether a trustee can sue the government to recover a fraudulent transfer under state law when sovereign immunity would bar an ‘actual creditor’ from suing.

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Opinion Link

View Opinion

https://www.supremecourt.gov/search.aspx?filename=/docket/docketfiles/html/public/23-824.html

Case Details

Case Citation

U.S. v. Miller, 23-824 (Sup. Ct.).

Case Name

U.S. v. Miller

Case Type

Business

Court

Supreme Court

Bankruptcy Tags

Fraudulent Transfers

Practice and Procedure

Bankruptcy Taxation

Business Reorganization

Govt. Claims/Sovereign Immunity

Comments

Submitted by Kyle Arendsen on July 1, 2024

Very excited to see how the Supreme Court resolves this conflict. It seems that the trustee should be permitted to pursue the state law fraudulent transfer claim via 544 according to 106(a)(1), but the government has a point when you think through how no actual creditor could pursue the claim outside of bankruptcy.