Legal News

U.S. Supreme Court grants certiorari in case involving Insider Status Determination of Claims Assignee

The Supreme Court yesterday granted certiorari in U.S. Bank NA v. The Village at Lakeridge LLC, but the high court will not review the more important question for chapter 11 practice, according to a special analysis from ABI Editor-at-Large Bill Rochelle. The justices will not decide whether the purchaser of a claim automatically takes on the seller's insider status, perhaps because the justices perceive no conflict among the circuits. Rather, the court will decide whether the standard of review for non-statutory insider status is de novo or clearly erroneous, or a combination of both. Curiously, the Acting Solicitor General recommended denial of certiorari, believing that in reality there are no circuit splits and that the Ninth Circuit made the correct holdings. To the contrary, the petitioner contends that the Third, Seventh and Tenth Circuits employ the de novo standard while the Ninth Circuit "for the first time" employed the clearly erroneous standard.