Supreme Court Agrees to Resolve Circuit Split Regarding Structured Dismissals
By Michael L. Moskowitz
The United States Supreme Court (SCOTUS) has agreed to resolve another bankruptcy issue which has split the circuit courts. This time, the high court will address a chapter 11 reorganization issue. The most recent SCOTUS decisions have focused primarily on consumer bankruptcy issues.
At issue here is whether bankruptcy courts may dismiss chapter 11 cases when property is distributed in a settlement that does not comply with the priority scheme for distributions set forth in Section 507 of the Bankruptcy Code.