Posted by Todd Zywicki:
The New Forum Shopping Problem in Bankruptcy:
http://volokh.com/archives/archive_2009_06_07-2009_06_13.shtml#1244741864
I have just posted a new paper on SSRN (co-authored with Marcus Cole),
"The New Forum Shopping Problem in Bankruptcy." Here's the abstract:
Abstract:
The American bankruptcy system is a hybrid of state law and federal
bankruptcy law. Under the Butner principle, federal bankruptcy
courts preserve non-bankruptcy law substantive entitlements in
bankruptcy unless bankruptcy policies compel a contrary result.
This hybrid system, however, gives rise to the threat of
forum-shopping if parties attempt to invoke bankruptcy jurisdiction
for improper purposes, namely to rearrange non-bankruptcy
entitlements to advance no coherent bankruptcy policy. Modern
developments in bankruptcy law, as exemplified in the case of
Marshall v. Marshall raise a novel threat of bankruptcy
forum-shopping. Marshall involved the bankruptcy of tabloid starlet
Anna Nicole Smith and her efforts to recover from the estate of
deceased billionaire oilman J. Howard Marshall. Rather than
deferring to the processes of the Texas probate court, Smith raced
into bankruptcy court in California to capture a large share of
Marshall�s estate. The technical issue in the case concerns whether
the dispute constituted a �core� matter under federal bankruptcy
law and thus the timing of the entry of a final judgment by the
bankruptcy court. If the Marshall Bankruptcy Court�s decision is
allowed to stand, it could set a precedent for rampant
forum-shopping by dissatisfied parties seeking a more favorable
resolution of claims in federal bankruptcy court than that to which
they would be entitled under state law.
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