(U.S. Sup. Ct. May 26, 2015)
The Supreme Court holds that certain claims entitled to Article III adjudication (i.e. Stern claims) may be decided by bankruptcy judges when the parties knowingly and voluntarily consent to such adjudication. Such consent does not have to be express. Here, the creditor filed a non-dischargeability complaint that included a count requesting a declaratory judgment that a trust was the alter-ego of the debtor. The bankruptcy court entered judgment against the debtor on that count (as well as the non-dischargeability counts). The debtor’s answer conceded that the action was a core proceeding and requested judgment in his favor on all counts. The Supreme Court remands to the Seventh Circuit to decide whether the debtor gave the requisite knowing and voluntary consent to entry of the final judgment by the bankruptcy court. Opinion below.
Author: Matt Lindblom