Supreme Court Limits Sovereign Immunity in Bankruptcy Avoidance Actions

Recently, the U.S. Supreme Court ruled that the Bankruptcy Code's abrogation of sovereign immunity under Section 106(a) does not extend to state law claims in avoidance actions under Bankruptcy Code Section 544(b). The decision resolves a long-standing circuit split and has significant implications for bankruptcy trustees and debtors-in-possession seeking to maximize the value of the bankruptcy estate. Check out this expertly drafted article discussing the decision.

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