On March 4, 2014, the Supreme Court issued its decision in Law v. Siegel. The question presented in this case was whether the US Court of Appeals for the Ninth Circuit erred in allowing a bankruptcy court to surcharge a debtor’s constitutionally protected homestead property to cover the bankruptcy trustee’s litigation expenses incurred as a result of the debtor’s misconduct.
In a unanimous opinion delivered by Justice Scalia, the Court held that the Bankruptcy Court exceeded the limits of its authority when it ordered that the $75,000 protected by the debtor’s homestead exemption be made available to pay the trustee’s attorney’s fees. The decision of the Ninth Circuit was reversed and the case remanded for further proceedings.
To discuss the case, we have Zvi Rosen, who is an adjunct professor at the New York Law School.