Not all federal protections carry equal weight — and two landmark 2023 decisions make that clearer than ever.
In this Legal League Quarterly article, ALAW Bankruptcy Partner Jeffrey S. Fraser examines a pair of federal court rulings that tested the reach of the Bankruptcy Code’s automatic stay against competing claims of sovereign immunity and criminal restitution obligations.
Fraser analyzes Lac du Flambeau Band of Lake Superior Chippewa Indians v. Coughlin (143 S. Ct. 1689), in which the U.S. Supreme Court held that the Bankruptcy Code’s abrogation provision extends to federally recognized Indian tribes — meaning tribal lenders cannot sidestep the automatic stay simply by invoking tribal sovereign immunity. He then turns to Turner v. United States (M.D.N.C. 2023), where a federal district court reached the opposite outcome, finding that the Mandatory Victims Restitution Act (MVRA) supersedes the Bankruptcy Code’s automatic stay when it comes to the enforcement of criminal restitution judgments.
Together, these cases underscore a critical principle: when a creditor seeks to operate outside the protections of federal bankruptcy law, the statutory language authorizing that exception must be clear, unambiguous, and unequivocal.
Read the full article in Legal League Quarterly Q3 2023 →