Yesterday the Supreme Court released its decision in Hall v. U.S. The five-four split surprised me. The substance of the case--whether taxes on the gains from the sale of a farm by a farmer in a Chapter 12 bankruptcy were "incurred by the bankruptcy estate" or by the farmer would make most of my readers' eyes glaze over but believe me, it meant a world of difference to the farmer and his other creditors. For a negative comment take a look at this post over at The Faculty Lounge blog.
Of more interest to me are the twin arguments advanced by Justice Sotomayor in her opinion for the five-member majority: plain meaning and past practice. These perspectives on statutory interpretation led to the same result in Hall. However, they may run into each other in the RadLAX case (on which I last blogged here but many times before).
The best argument for the debtor hotel in RadLAX to prohibit the lenders from credit bidding is the plain language of Bankruptcy Code 1129. On the other hand, the long-standing historical practice both inside and outside bankruptcy cases has been to permit credit bidding.
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