An ABI Committee Newsletter
|
|
| Vol 22, Num 1 | August, 2026
|
|
|
The Triggering Creditor After Miller: A Renewed Focus on Derivative Standing and Sovereign Immunity
|
|
by Sonali Doshi, Ciardi Ciardi & Astin (Philadelphia)
|
|
For decades, bankruptcy practitioners have viewed the avoidance powers of a trustee as a powerful tool. Section 544(b) of the Bankruptcy Code permits a trustee to "step into the shoes" of an actual unsecured creditor and invoke applicable nonbankruptcy law to avoid transfers that would otherwise be voidable outside of bankruptcy. In practice, the provision often provides access to longer lookback periods and broader remedies than those available under § 548 of the Code.
The Supreme Court's recent decision in United States v. Miller, however, serves as an important reminder that § 544(b) is a derivative cause of action, that the trustee acquires no greater rights than the triggering creditor itself possessed outside of bankruptcy, and that the trustee remains subject to the same defenses that could have been asserted against the creditor. In doing so, the
court rejected the argument that § 106(a)'s waiver of sovereign immunity permits a trustee to pursue claims against the federal government where no actual creditor could have done so outside bankruptcy.
Read Full Article Online →
|
|
|
When a Judgment Is Not a Judgment
|
|
by Joshua J. Baumann, Community Legal Aid (Youngstown, Ohio)
|
|
One of the most important reasons consumers declare bankruptcy is to obtain the relief — the breathing spell — provided by the automatic stay. For those facing eviction, the automatic stay can provide crucial time to address defaults with the lessor or to secure alternate housing.
As with many areas of bankruptcy, however, timing is critical. This is especially true with eviction proceedings, because the automatic stay does not apply to prevent eviction proceedings by a lessor against a debtor for leased or rented residential property where "the lessor has obtained before the date of the filing of the bankruptcy petition, a judgment for possession of such property against the debtor. . . ." Thus, the automatic stay generally does not prevent the enforcement of a pre-petition eviction judgment for leased residential property.
There are exceptions,
however, that may allow the debtor to ensure the automatic stay will be in effect despite a pre-petition order of eviction. First, there is an explicit but very limited exception provided by the Bankruptcy Code. Second, there is an implicit exception based on the Code's use of the word "judgment."
Read Full Article Online →
|
|
|
Director and Officer Liability in Bankruptcy: From Background Risk to Central Battleground?
|
|
by Jared M. Tully, FBT Gibbons (Charleston, W.Va.)
|
|
Director and officer (D&O) liability has largely been a background issue in bankruptcy cases — a theoretical risk typically neutralized in practice by charter-level exculpation, indemnification agreements, broad plan releases and predictable access to D&O insurance proceeds. Recently, however, such liability has emerged as a central restructuring issue, and it will likely remain one in future cases. The relative impact of D&O liability has evolved into a driver of leverage, litigation strategy and insurance economics. Recent case law, culminating in the Supreme Court's decision in Harrington v. Purdue Pharma L.P., has amplified individual exposure at the same time bankruptcy estates have become more adept at monetizing fiduciary and insider claims.
That alone, though, does not explain the increased focus on D&O liability. As bankruptcy
and restructuring professionals and courts race to keep up with technological change — specifically in the crypto industry — the picture of D&O liability has been fundamentally reframed and is viewed through a new lens. At the same time, bankruptcy estates have become more sophisticated claim-monetizers. Litigation trusts, structured claim sales and litigation-funding arrangements have transformed fiduciary and avoidance claims into realizable assets, particularly where operating recoveries are limited.
Read Full Article Online →
|
|
|
©2026 American Bankruptcy Institute
All Rights Reserved
American Bankruptcy Institute
99 Canal Center Plaza
Suite 200
Alexandria, VA 22314
Email Preferences | View Online
|
|
|
|
|
