Also known as: bankruptcy courts · U.S. Bankruptcy Court
Written by attorneys · grounded in primary & secondary sources — see below
A subunit of a United States district court consisting of the bankruptcy judges for the district and charged with administering bankruptcy cases and proceedings. The court functions as an Article I tribunal whose judges lack life tenure and salary protection. Its authority to enter final judgments on certain claims is limited by Article III when the claims involve traditional private rights disputes between parties.
Bruce Baldwin, a supplier, sued Barclay Financial in state court for breach of a supply contract. Barclay filed Chapter 11, and the trustee asked the bankruptcy court to enter final judgment on the claim as part of estate administration. The bankruptcy court lacked authority to do so because the claim was a traditional state-law contract dispute between private parties.
Bethany Boyd, a bankruptcy trustee, sued a former customer in the bankruptcy court to recover an alleged preference. The defendant demanded a jury trial on the factual issues. The bankruptcy court could not conduct the jury trial because it sits as a court of equity under the Bankruptcy Act.
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Bianca Baker obtained a judgment against a debtor in district court. After the debtor filed bankruptcy, Baker sought to use the judgment to bar relitigation of issues in the bankruptcy court. The bankruptcy court properly gave the prior judgment preclusive effect because the earlier proceeding had afforded a full and fair opportunity to litigate.
Brooke Bryant, a bankruptcy debtor, filed a counterclaim in the bankruptcy court against a creditor for tortious interference with an expected inheritance. The bankruptcy court could not enter final judgment on the counterclaim because it was a state-law claim between private parties that did not arise under the Bankruptcy Code.
Brittany Bell, a Chapter 7 trustee, sought to recover estate property from a state agency in the bankruptcy court. The bankruptcy court had jurisdiction because the Eleventh Amendment does not bar proceedings with a direct impact on state financial interests such as dischargeability determinations.
Bradley Banks, a debtor in possession, asked the bankruptcy court to excuse performance of a long-term supply contract because market prices had shifted dramatically. The bankruptcy court applied ordinary contract principles to decide whether the defense of frustration of purpose was available.
Article III prevents Congress from assigning traditional private-rights disputes, such as state-law contract claims between private parties, to non-Article III bankruptcy courts for final adjudication. A broad grant of such jurisdiction violates the separation of powers.
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The bankruptcy court sits as a court of equity and generally cannot conduct jury trials on legal claims because jury trials would be incompatible with its equitable role under the Bankruptcy Act.
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A prior judgment receives preclusive effect in the bankruptcy court when the earlier proceeding provided a full and fair opportunity to litigate the issues.
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…rule were confirmed by this Court's decision in Katchen v. Landy , 382 U. S. 323. In that case the Court held that a bankruptcy court, sitting as a statutory court of equity, is empowered to adjudicate equitable claims prior to legal claims, even though the factual issues decided in the equity action would have been…