Authors:

Courts Remedial Powers Hyojin Joo

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About Paper:

This research examines how a recent Supreme Court decision (Trump v. Casa, Inc.) affects cross-border bankruptcy proceedings. In Trump v. Casa, Inc., the Court held that federal courts in civil proceedings could not issue injunctions in favour of individuals not party to the case before the court ("non-party injunctions"). Although the court did not mention bankruptcy law, injunctions in favour of non-parties are widely used in cross-border bankruptcies filed under Chapter 15 of the United States Bankruptcy Code. The question we address is whether the bankruptcy court's power to issue those injunctions survives the Court's holding in Trump v. Casa. Cross-border bankruptcy under Chapter 15 involves a company that, upon completing a foreign bankruptcy proceeding, seeks to enforce the same remedies in the U.S. When a foreign court has issued non-party injunctions in the original proceeding, United States bankruptcy courts commonly issue identical injunctions that are enforceable in the United States. They may also issue a new non-party injunction—one that was not issued by the foreign court—to support the foreign proceeding. Our research analyses the history of bankruptcy statutes and cross-border proceedings to identify statutory grounds that enable bankruptcy courts to issue non-party injunctions in Chapter 15 cases. Our preliminary analysis suggests that the courts are prohibited from issuing new non-party injunctions to support foreign proceedings. Our conclusions are more tentative regarding injunctions identical to those issued by the foreign court. Our historical findings also suggest that Congress may have contemplated the practice when drafting Chapter 15.

Source:

University of Chicago

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Courts Remedial Powers Hyojin Joo