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§ 106

In re Supreme Beef Processors Inc.

Ruling
Waiver of sovereign immunity could not be used to create a cause of action that did not exist outside of bankruptcy.
Procedural posture

The District Court for the Eastern District of Texas dismissed the debtor's tort claims against the creditor United States Department of Agriculture as barred by sovereign immunity. On the debtor's appeal, a panel of the Fifth Circuit held that permissive counterclaims could be used as a setoff under 11 U.S.C. § 106(c) as a waiver of sovereign immunity. The case was reconsidered en banc.

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Court :
Judge or Jurisdiction information not available
opinion summary, case decided on October 19, 2006 , LexisNexis #1106-049

Vermont Dept. of Taxes v. Quality Stores Inc. (In re Quality Stores Inc.)

Ruling
Turnover proceeding against state revenue department was not barred by sovereign immunity.
Procedural posture

Appellee retail store filed an adversary proceeding against appellant Vermont Department of Taxes pursuant to 11 U.S.C. §§ 541, 542 and 505, seeking the turnover of funds for allegedly overpaid sales taxes for two tax years. The State sought review of a decision of the bankruptcy court, which denied its motion to dismiss on the basis of sovereign immunity. The State elected to have its appeal heard by the federal district court.

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opinion summary, case decided on October 04, 2006 , LexisNexis #1006-118

Central Va. Cmty. College v. Katz

Ruling
Supreme Court affirmed a denial of state institutions of higher education's motion to dismiss an alleged preferential transfers proceeding since Congress pursuant to the Bankruptcy Clause had determined that states were amenable to such proceedings and thus could not use sovereign immunity to bar such proceedings.
Procedural posture

Respondent liquidating supervisor of a bankrupt estate commenced 11 U.S.C. §§ 547(b) and 550(a) proceedings to avoid and recover alleged preferential transfers to petitioner state institutions of higher education. The court of appeals affirmed a denial of a motion to dismiss. Certiorari was granted on the question whether the attempt to abrogate state sovereign immunity in 11 U.S.C. § 106(a) was valid.

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opinion summary, case decided on January 23, 2006 , LexisNexis #0206-002