{"id":4951,"date":"2025-03-27T19:20:18","date_gmt":"2025-03-27T19:20:18","guid":{"rendered":"https:\/\/usatrustedlawyers.com\/blog\/scotus-refines-trustees-power-to-claw-back-tax-payments\/"},"modified":"2025-03-27T19:20:18","modified_gmt":"2025-03-27T19:20:18","slug":"scotus-refines-trustees-power-to-claw-back-tax-payments","status":"publish","type":"post","link":"https:\/\/usatrustedlawyers.com\/blog\/scotus-refines-trustees-power-to-claw-back-tax-payments\/","title":{"rendered":"SCOTUS refines trustee\u2019s power to claw back tax payments"},"content":{"rendered":"\n<div>\n<div id=\"ra-player\" data-skin=\"https:\/\/assets.sitespeaker.link\/embed\/skins\/default\">\n<div class=\"ra-button\" onclick=\"readAloud(document.getElementById('ra-audio'), document.getElementById('ra-player'))\"> Listen to this article<\/div>\n<\/div>\n<p><audio id=\"ra-audio\" data-lang=\"en-US\" data-voice=\"Amazon Joanna\" data-key=\"9a894192b5d95537bb1afa80262745f5\"\/><\/p>\n<p>In a case involving a bankruptcy trustee\u2019s \u00a7544(b) action to claw back $145,000 shareholders in a failed Utah company misappropriated to pay their personal tax liabilities, Bankruptcy Code \u00a7106(a)\u2019s sovereign-immunity waiver applies only to the \u00a7544(b) claim and not to state-law claims \u201cnested\u201d within that federal claim, the U.S. Supreme Court ruled 8-1 in reversing a decision from the 10th Circuit. Click here to read the full text of <em>United States v. Miller<\/em>.\n<\/p>\n<p><strong>BULLET POINTS:<\/strong>\n<\/p>\n<p>\u201cWaivers of sovereign immunity are jurisdictional provisions that empower courts to hear claims against the Government but do not themselves typically create any new substantive rights against the Government. Here, statutory text, context, and structure all demonstrate that \u00a7106(a) fits squarely within that mold.\u201d<br \/><strong>\u2014 Justice Ketanji Brown Jackson, majority opinion<\/strong><\/p>\n<p>\u201cThree statutory provisions are relevant here. First is 11 U.S.C. \u00a7106(a)(1), which waives the government\u2019s sovereign immunity \u2018with respect to\u2019 \u00a7544 of the Bankruptcy Code. Second is \u00a7544(b)(1), which empowers a bankruptcy trustee to invoke the rights of \u2018a creditor holding an unsecured claim\u2019 to set aside any transfer \u2018that is voidable under applicable law.\u2019 And third is Utah\u2019s fraudulent-transfer statute, which here supplies the \u2018applicable law\u2019 for purposes of \u00a7544(b)(1).\n<\/p>\n<p>\u201cAs I see it, those three provisions play out this way. Under the Utah statute, a transfer is \u2018voidable\u2019 if, after a creditor\u2019s claim arose against the debtor, the debtor (1) \u2018made the transfer\u2019 (2) \u2018without receiving a reasonably equivalent value in exchange,\u2019 and (3) \u2018was insolvent at the time.\u2019 Notably, no one before us disputes that these conditions are satisfied here and a good fraudulent-transfer claim exists. Thus, under \u2018applicable law,\u2019 the relevant transfers are \u2018voidable,\u2019 and the bankruptcy trustee can use \u00a7544(b)(1) to set them aside. That remains true even though the trustee must sue the United States to void the relevant transfers, because \u00a7106(a)(1) bars the government from raising a sovereign-immunity defense in the trustee\u2019s action.\u201d<br \/><strong>\u2014 Justice Neil M. Gorsuch, dissenting<\/strong>\n<\/p>\n<p><!-- post-single CPT Filter Start --><!-- post-single CPT Filter End    --><\/div>\n","protected":false},"excerpt":{"rendered":"<p>Listen to this article In a case involving a bankruptcy trustee\u2019s \u00a7544(b) action to claw back $145,000 shareholders in a failed Utah company misappropriated to pay their personal [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":4952,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[116],"tags":[5259,252,1081,5257,350,4443,5258],"class_list":["post-4951","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-bankruptcy","tag-claw","tag-payments","tag-power","tag-refines","tag-scotus","tag-tax","tag-trustees"],"_links":{"self":[{"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/posts\/4951","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/comments?post=4951"}],"version-history":[{"count":0,"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/posts\/4951\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/media\/4952"}],"wp:attachment":[{"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/media?parent=4951"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/categories?post=4951"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/tags?post=4951"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}