The Law Office of Kurt H King

December 22, 2015

Does Bankruptcy Court have Power to Hear Counterclaims in Adversary Proceedings?

If you file an Adversary proceeding in Bankruptcy Court, and defendant files counterclaims for infliction of emotional distress (actionable under state law), read the US Supreme Court’s 2011 opinion in Stern v. Marshall, 564 U.S. ___, 131 S. Ct. 2594.  There the high court reviews Article III powers of bankruptcy courts regarding such claims and rules that the bankruptcy court lacks power to enter final judgment on counterclaims of that species.  However, the remedy is not dismissal for lack of jurisdiction, but rather transfer to federal District Court (or the parties may consent to trial before the bankruptcy judge).

Law Office of Kurt H. King

20 E. Franklin, Liberty, Missouri 64068; 816.781.6000

Civil Practice including Litigation of Personal Injury and Property Claims, Workers’ Compensation, Family Law Matters

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